U.S. Midterms Keeping Gold Investors On Their Toes
(Kitco News)- Wall Street looks for gold prices to rise next week, although many in the weekly Kitco News gold surveyalso described themselves as neutral at the moment due to uncertaintysurrounding U.S. midterm elections on Tuesday.
Main Street remainedbullish.
The Republicans are seenmaintaining control of the U.S. Senate, but news reports suggest Democrats havea chance to take control of the House of Representatives. If so, that wouldprovide a check on efforts by President Donald Trump to push through his agendaand could mean gridlock in Congress.
Fifteen marketprofessionals took part in the Wall Street survey. Eight respondents, or 53%,predicted higher prices by next Friday. Two respondents, or 13%, called forlower, while five participants, or 33%, looked for a sideways market.
Meanwhile, 447 peopleresponded to an online Main Street poll. A total of 255 respondents, or 57%,called for gold to rise. Another 127, or 28%, predicted gold would fall. Theremaining 65 voters, or 15%, see a sideways market.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral For the trading week nowwinding down, roughly two-thirds of Wall Street and Main Street voters werebullish. As of 11:11 a.m. EDT, Comex December gold was 0.2% lower for the weekso far at $1,233.20 an ounce.
Phil Flynn, senior marketanalyst with at Price Futures Group, is among those who are expecting gold torise.
“Risk-on is back with thepossibility of a Trump-China trade deal and a top in the dollar,” Flynn said.“The dollar has shown some reluctance to go higher as rate increases forDecember are priced in by least 70%.”
Ralph Preston, principalwith Heritage West Financial, said that he is “looking for a pop higher. Crudeoil’s massive sell-off may very well snap back on a geopolitical event, addinga slight lift to gold prices throughout the month of November.”
Sean Lusk, director ofcommercial hedging with Walsh Trading, looks for gold to rise, doubting thatmany traders would want to be aggressively bearish ahead of U.S. midtermelections. Should Democrats wrest at least one chamber of Congress away fromthe Republicans, the expectation for a stalemate in Congress could boost goldprices, Lusk explained.
However, he added, “itcould already be priced in somewhat.”
Bob Haberkorn, seniorcommodities broker with RJO Futures, looks for gold to move lower, citing astabilizing equity market and likelihood that the Federal Reserve keepstightening monetary policy.
“Unless the Fed changesits tune, gold will remain under pressure with a hawkish Fed,” Haberkorn said.
A number of voters pointedto the congressional elections as a factor behind their neutral votes.
“So much depends on themidterm election results in the U.S.,” said Adrian Day, chairman and chiefexecutive officer of Adrian Day Asset Management. “If Republicans hold House,probably good for the dollar and negative for gold in near term. For now, I'llsay unchanged.”
Peter Hug, global tradingdirector with Kitco Metals, also said the near-term direction of gold may hingeon midterm elections in the U.S.
“If Republicans maintain amajority, I think gold may soften after Tuesday,” Hug said. “If Democrats takethe majority, I see gold higher.”
Kevin Grady, president ofPhoenix Futures and Options LLC, is neutral based on the charts.
“Gold seems to be stuck inthe $1,213 to $1,246 range,” Grady said. “I would not turn bullish until webreak the 38% retracement of $1,253.”
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.  |