Kitco News Gold Survey: Wall St., Main St. Differ On Price Outlook
(Kitco News) - Forthe first time this year, there is a sharp divergence between Wall Street andMain Street in the weekly Kitco News gold survey.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral Themajority of traders and analysts who make up the Wall Street poll look for theyellow metal to remain on the defensive next week, while Kitco readers who takepart in an online poll look for gold to bounce. Previously, both camps werebullish in each poll so far in 2018.
Goldis heading for a loss on the week, falling sharply Friday after the U.S. LaborDepartment reported a stronger-than-forecast 200,000 rise in January nonfarmpayrolls. Further, the report showed wages continuing to rise, seen as a signof building inflation. Hourly earnings increased 0.3% in January after a 0.4%rise in December. The data enabled the U.S. dollar to rise, thereby pressuring gold.
Seventeenmarket professionals took part in the Wall Street survey. Eleven, or 65%,called for gold to fall. There were three votes each, or 18%, calling forhigher and sideways prices.
Meanwhile,1,060 votes were cast in an online Main Street poll. A total of 676 voters, or64%, looked for gold to climb next week. Another 238, or 22%, said lower, while146, or 14%, were neutral.
Forthe trading week now winding down, 52% of Wall Street voters and 62% of MainStreet voters were bullish. Around of 11 a.m. EST, Comex April gold was down 1%for the week so far to $1,332.30 an ounce.
Notcounting the current week, Wall Street and Main Street are both 2-1 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).
RobinBhar, metals analyst at Societe Generale, is among the Wall Street majorityseeing lower prices in the week ahead, citing potential for a recovery in therecently soft U.S. dollar.
“Therewill still be some ramifications from today’s strong jobs number reported inthe U.S., where we see inflationary pressures building,” he said. “That couldmake the FOMC more hawkish than they are now.”
Alarge number of traders still hold bullish positions in gold, meaning there ispotential for more of a correction lower, said Kevin Grady, president ofPhoenix Futures and Options LLC, and Sean Lusk, director of commercial hedgingwith Walsh Trading.
“They[Federal Reserve policymakers] are going to be raising rates in March,” Gradysaid. “The higher rates at some point should start putting pressure on gold.”
AddedLusk: “The market is a little susceptible to some back-and-fill. We’ll see howthe dollar does.”
OleHansen, head of commodity strategy at Saxo Bank, said that he is cautiouslybearish on gold next week.
“Iam in correction mode right now so prices could go lower,” he said. “But Idon’t see a collapse in gold. When the dust settles, there are still underlyingreasons to own gold.”
RichardBaker, editor of the Eureka Miner Report, also sees more weakness in theaftermath of the employment data.
“Thebetter-than-expected jobs report this morning accelerated the 10-year Treasuryabove 2.8% and rebounded the U.S. dollar off three-year lows -- both bearishheadwinds for gold,” Baker said. “However, a solid uptick in average hourlywages and steady advance of broader commodity indexes to multi-year levelssuggest inflation is in the air -- a bullish counterbalance to rising interestrates and a potentially more hawkish U.S. Federal Reserve in 2018. For the nearterm, I believe the forces on gold price are net bearish, resulting in aretreat to the $1,320-level by next week.”
PhilFlynn, senior market analyst with at Price Futures Group, looks for gold tostart slow but recover to finish next week higher than where it leaves off thisweek.
“We’vebeen in a weak-dollar environment even with the expectation the Fed is going toraise rates,” he said. “With the strong jobs number, we may start the week ingold weak....We think the gold market will rebound as we go into the week oninflation worries.”
AdrianDay, chairman and chief executive officer of Adrian Day Asset Management, isamong those who look for gold to be sideways.
“Aconsolidation of the recent gains is overdue, and without a new stimulus forgold to move higher, it will likely consolidate,” Day said. “Much depends onthe dollar, of course.”
JimWyckoff, senior technical analyst with Kitco, sees gold “sideways and choppy,”adding that “technicals have deteriorated a bit this week.”
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.