Kitco News Gold Survey: Gold Prices Expected To Keep Rising
(Kitco News) - Participants in the weekly Kitco News gold survey look for gold tokeep rising next week, with traders and analysts citing the softer tone in theU.S. dollar.
Wall Street
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Main Street
Bullish Bearish Neutral The greenback fell sharply this week after U.S. Treasury SecretarySteven Mnuchin said a softer U.S. dollar was good for the economy, although helater said his comments were taken out of context and President Donald Trumpsuggested he favors a stronger dollar.
Twenty-one market professionals took part in the Wall Streetsurvey. Eleven, or 52%, called for gold to rise. There were eight votes, or38%, saying gold would fall, while two participants, or 10%, called for asideways market.
Meanwhile, 708 votes were cast in an online Main Street poll. Atotal of 436 voters, or 62%, looked for gold to climb in the next week. Another190, or 27%, said lower, while 82, or 12%, were neutral.
For the trading week now winding down, 71% of Wall Street votersand 61% of Main Street voters were bullish. As of 11:10 a.m. EST, ComexFebruary gold was up by 1.3% for the week so far to $1,350.70 an ounce.
Not counting the current week, Wall Street and Main Street areboth 1-1 so far in 2018. For the year 2017, Main Street was right 31 of 50times for a winning percentage of 62%.Wall Street forecasters collectively wereright 30 of 51 times for 59%. (There were two weeks without a Main Street polland one week without a Wall Street poll).
Afshin Nabavi, head of trading at trading house MKS (Switzerland),sees gold moving into a higher range, listing the area around $1,375 on theupside and $1,345 to $1,340 on the downside.
“The dollar - despite the rhetoric - seems to be under pressure,”Nabavi said. “The numbers [Friday U.S. economic data] were not excellent.The metals should be bought on dips.”
Phil Flynn, senior market analyst with at Price Futures Group,looks for gold to bounce from Friday’s weakness as the dollar remains soft. Hesuggested the market will view comments from the U.S. administration as stillfavoring a softer dollar in the short term, despite subsequent strong-dollarstatements.
JimWyckoff, senior technical-chart analyst with Kitco, said the charts remainfirmly bullish.
“TheU.S. dollar is struggling and that will continue to boost gold in the month andweek ahead,” said Adam Button, currency analyst at Forexlive.com.
Meanwhile, Adrian Day, chairman and chief executive officer of AdrianDay Asset Management, is among those looking for a pullback.
“Gold needs to consolidate a little after the strong move sinceearly December,” Day said. “With the government shutdown out of the way fornow, one support for gold is removed. Similarly for the Korean d?(C)tenteduring the Olympics. Fundamentally, we remain bullish, however.”
Ken Morrison, editor of the newsletter Morrison on theMarkets, also anticipates a correction.
“This has already been a historic week for gold. Bullishsentiment exceeded 90%, the highest in six years, and volume on the week mayexceed the November 2016 record,” Morrison said. “Gold has achieved a pricetarget this week, matching the September 2017 top, filling a price gap in theprocess. The September time-frame is also important because sentiment for thedollar was extremely bearish as it is now. Given the run gold's had and theextreme condition of sentiment, gold and the dollar, a corrective pullback to$1,330 seems the most likely near-term path next week.”
Kevin Grady, president of Phoenix Futures and Options LLC, alsosees a retreat after gold ran up on dollar weakness. “I think it’s getting tobe a crowded trade,” he added.
By Allen SykoraFor Kitco News
Follow @AllenSykora
asykora@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.