Kitco News Gold Survey: Wall, Main St. Slightly Split On Price Direction
(Kitco News) - WallStreet and Main Street continue to have opposing viewpoints on the short-termprice direction of gold, although the difference has narrowed, based on theweekly Kitco News gold survey.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral Forthe second Friday in a row, the largest Wall Street bloc of voters called forgold to fall over the next week, although the 50% who said lower is down fromthe 65% bearish vote a week ago. Main Street said higher, although the 56%bullish vote is down from 64% a week ago. Previously, both camps had beenbullish for six weeks in a row.
Twentymarket professionals took part in the Wall Street survey, with ten calling forgold to fall. Six voters, or 30%, said higher, while four, or 20%, called forthe market to be sideways.
Meanwhile,731 votes were cast in an online Main Street poll, with 408 voters bullish.Another 219, or 30%, said lower, while 104, or 14%, were neutral.
Forthe trading week now winding down, 65% of Wall Street voters were bearish while64% of Main Street voters were bullish. As of 11:05 a.m. EST, Comex April goldwas down 1.6% for the week so far to $1,316.40 an ounce.
Notcounting the current week, Wall Street and Main Street are both 2-2 so far in2018. For the year 2017, Main Street was right 31 of 50 times for a winningpercentage of 62%.Wall Street forecasters collectively were right 30 of 51times for 59%. (There were two weeks without a Main Street poll and one weekwithout a Wall Street poll).
“Iam bearish on gold for next week and think it could fall to test $1,300,” saidColin Cieszynski, chief market strategist at The Fundamental Technician. “Goldhas completed a rounded top pattern while the U.S. dollar has completed arounded bottom. Meanwhile, stocks and cryptocurrencies have stabilized and theshort-lived flight into safe havens like gold has already started to subside.”
KenMorrison, editor of the newsletter Morrison on the Markets, suggested goldcould test the $1,300 area next week but hold.
“Theweek has generally seen money-managers paring down positions in commodities,especially gold and crude oil, as evidenced by price and open interest movingin the same direction - lower,” Morrison said. “I expect stability to return toequities next week, which probably means gold will lose some of itsflight-to-safety support.”
Ralph Preston, principal with Heritage West Financial, said he is looking for“a technical test of $1,296 support on the back of a firming U.S. dollar.”
JasperLawler, head of research at London Capital Group, is also bearish on gold nextweek.
“Althoughit feels like gold is getting ready for a breakout, I think you can’t ignorewhat the charts are showing. We are down two weeks in a row so I think weprobably get a bit of a dip below $1,300 before the breakout comes,” Lawlersaid.
KevinGrady, president of Phoenix Futures and Options LLC, also sees furtherweakness, commenting that there has not been a strong correlation in whichweaker stocks underpin gold. “This is not 2008-2009, when we were worried aboutbank failures and things like that,” he added.
Meanwhile,Bob Haberkorn, senior commodities broker with RJO Futures, looks for gold torise although not dramatically. Support may come from uncertainty about equitymarkets, he said. He noted that much of the recent weakness has been due toworries about rising bond yields.
“Ithink next week, you’ll see traders shake that off a bit,” Haberkorn said.
GeorgeGero, managing director with RBC Wealth Management, sees potential for shorts(bearish traders) to buy in order to cover positions “if puts are not in themoney.”
AdamButton, currency analyst at Forexlive.com, also said higher.
“Thecountdown to [the] Lunar New Year and a cool-off from the market fears shouldhelp gold bounce back,” Button said. “And the Olympics in South Korea should bea powerful reminder that nothing is better than gold.”
AdrianDay, chairman and chief executive officer of Adrian Day Asset Management, isamong those who see a largely unchanged gold market.
“Ifthe global stock markets continue to decline, people will be looking at gold asa source of funds for margin calls, etc.,” he said. “But gold is also seen as ahedge so therewill be buying, and we have seen some air out of the market in the last coupleof weeks. So on balance, I would suggest little net change.”
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.