Kitco News Gold Survey: Bulls To Keep Control Of Prices Next Week

(Kitco News) - Lack of clarity in Washington and weak U.S. dollar will continue to support gold prices next week, which are set to make more gains, according to precious metals experts and Kitco readers who participated in the weekly gold survey.

Gold prices on Friday were regaining their lost ground, boosted by renewed weakness in the U.S. dollar, ahead of a possible government shutdown. Spot gold on Kitco.com was last seen trading at $1,334.00, up 0.57% on the day.

Meanwhile, the U.S. dollar index struggled near three-year lows, trading at 90.56, as Republicans rushed to get enough votes to pass the budget before the midnight’s looming deadline.

Wall Street

Bullish Bearish Neutral

VS

Main Street

Bullish Bearish Neutral

Out of the 17 market professional who took pay in the Wall Street gold survey, 41.2% voted for gold to rise next week, 35.3% of the respondents said gold is likely to fall, and 23.5% voted for prices to trade sideways.

In comparison, Main Street poll, which is comprised of 845 Kitco readers, was much more bullish, with 61.8% of the participants calling for higher prices next week, 28.9% projecting lower levels, and 9.3% remaining neutral.

Last week’s survey also estimated for gold to head higher, with 71% of Wall Street and 61% of Main Street being bullish on gold. Just prior to Comex gold market closing, February gold was flat on the week, last trading at $1,334.50 an ounce.

One of the main drivers that are expected to support gold is a weak U.S. dollar, according to precious metals analysts.

“We are getting into a silly season in America, where we could be having a government shutdown, which will hurt the U.S. dollar and support gold,” Bart Melek, head of global strategy at TD Securities, told Kitco News.

Melek added that he wouldn’t be surprised to see gold touch the $1,357 level next week.

And even if a government shutdown is averted in time, George Gero, managing director at RBC Wealth Management, said that gold prices will climb, as the “drama” in Washington won’t be over. “[Averting the shutdown] is only kicking the can down the road until February,” Gero said.

“I’m looking for gold to hit $1,400 by the end of the year. In the meantime, prices will probably remain between $1,325-$1,350,” he noted.

Renewed pressure on bitcoin will also help gold rise next week, according to Phillip Streible, senior market strategist at RJO Futures.

“We’ve seen quite a lot of liquidation this week in bitcoin, with increased scrutiny from South Korea and China,” Streible said. “What bitcoin was stealing from the gold market is now starting to reverse and [attention] is coming back to gold.”

He added that gold prices are looking “really good” right now, with levels likely to hit $1,350 next week.

Streible also sees further weakening in store for the U.S. dollar. “The U.S. dollar index is just barely onto 90, and it will start a new trend lower, which should help support gold.”

Some analysts, however, remain slightly more cautious, estimating that the U.S. dollar will show slightly more strength than markets anticipate.

“In the near-term, the U.S. dollar might show a little less weakness than expected as the tax reform and the performance of the equity markets might prompt the dollar up, which is somewhat negative for gold prices,” said Nick Exarhos, economist at CIBC World Markets.

But, trade uncertainties surrounding China and NAFTA negotiations could work in favor of gold, which could keep prices unchanged from this week’s levels, Exarhos added.

Here is a sampling of thoughts from Kitco Main Street voters on Kitco’s commenting Kitco Chat:

By Anna Golubova

For Kitco News

Follow annagolubovaagolubova@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Canadian political turmoil with Trump trade policy the catalyst

Canada and US import tariffs remain low

Major metals not gaining much on China stimulus announcements

Spectre of stagflation looms over base metals

TSXV large gold gains overall, but a mixed story underneath