Wall St. Bearish, Main St. Split On Gold Prices
(Kitco News)- Wall Street looks forgold’s downward momentum to continue next week, while Main Street voters are ina near dead heat on whether gold will rise or fall.
After hovering around$1,200 an ounce for several weeks, gold turned south again this week after theFederal Open Market Committee not only hiked interest rates by another 25 basispoints but appeared to remain hawkish for the foreseeable future. This boostedthe U.S. dollar, with the greenback also getting a lift against the euro frombudget uncertainties in Italy.
Seventeen marketprofessionals took part in the Wall Street survey. Eleven respondents, or 59%,predicted lower prices by next Friday. There were three votes, or 18%, callingfor higher prices, while four respondents, or 24%, were neutral or looked for asideways market.
Meanwhile, 549 peopleresponded to an online Main Street poll. A total of 233 respondents, or 42%,called for gold to rise. Another 230, also 42%, predicted gold would fall. Theremaining 86 voters, or 16%, see a sideways market.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral For the trading week nowwinding down, 72% of Wall Street voters and 57% of Main Street respondents werebullish. As of 11:13 a.m. EDT, Comex December gold was down 0.5% for the weekso far to $1,195 an ounce.
“We’re looking for a breaklower to the downside,” said Ralph Preston, principal with Heritage WestFinancial.
Phil Flynn, senior marketanalyst with at Price Futures Group, said gold remains vulnerable.
“Gold can’t get a break,”Flynn said. “Even with the expected Fed rate hike, the dollar soared on strongU.S. economic data. The [gold] market broke out to the downside, leaving itvulnerable for further losses next week.”
Kevin Grady, president ofPhoenix Futures and Options LLC, sees potential for December gold to retest theAugust lows below $1,168 an ounce. He cites the combination of tightening ofmonetary policy by the Federal Reserve and 10-year Treasury yields above 3%re-exerting pressure on gold after the metal seemed to find “fair value” for awhile near the $1,200 area.
“Every time the markettries to rally, there is selling above the market,” Grady said. “Gold is havinga hard time....I think the bears are in control and we’re going to test thoselows.”
Independent technicalanalyst Darin Newsom also sees a retest of last month’s lows.
“December gold moved to anew four-week low of $1,184.30 (so far) this week,” Newsom said
Friday morning. “Thatopens the door to test the previous low of $1,167.10.”
Mark Leibovit, editor ofthe VR Gold Letter, sees gold under $1,172, commenting: “I am a bear.”
Meanwhile, George Gero,managing director with RBC Wealth Management, looks for gold to bounce nextweek since the “negatives [are] already priced in,” with potential for shortcovering and bargain hunting.
“I have just switched frombearish to bullish on gold for next week,” said Colin Cieszynski, chief marketstrategist at SIA Wealth Management. “Gold had been dropping but has bouncedback nicely this morning. The Fed meeting is over, and U.S. Treasury yields areeasing back, so the USD should as well, taking some of the pressure off gold. Ithink a gain would be more of a trading bounce, however, with resistancepossible near $1,200 or $1,220.”
An Australian reader namedRobert predicted that gold will rise $20 in the coming week, perhaps testing resistanceat $1,220. Longer term, “buckle up and enjoy the ride to $1,350!'' he said.
''Only last month have wehad 2018 lows for gold, and then on the back of some dovish comments last weekfrom Fed Chair [Jerome] Powell, it rose $20 alone, suggesting it is massively,and I stress ‘massively,’ oversold. Gold has seen its bottom.”
Sean Lusk, director ofcommercial hedging Walsh Trading, said he is neutral for the next week butbullish for the longer term. After noting that gold is down approximately 10% forthe year, he commented that eventually, the break below $1,200 should attractsome bargain hunting and profit-taking by traders with short, or bearish,positions.
“What is going to takefunds and the trade overall to establish longer-term gold positions?” he askedrhetorically. He later added, “We’re looking for dips to get long [buy] again.”
Ole Hansen, head ofcommodity strategy at Saxo Bank, also said he is neutral on gold in the nearterm. Despite the latest selling pressure, he noted that gold is still withinits recent range and it could remain stuck there as investors see littleimmediate need for safe-haven assets.
“The U.S. economy remainsstrong, and that is supporting the U.S. dollar and equity markets. Investorsdon’t see the need to build a rainy-day fund as markets are pretty muchbehaving themselves,” Hansen said.
By Allen Sykora
For 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.