Wall St. Bullish, Main St. See Higher Gold Prices
(Kitco News)- The largest voting blocs on both Wall Street and MainStreet look for the price of gold to rise next week, based on the weekly KitcoNews gold survey.
Wall Street traders and analysts cited expectations forsome kind of bounce from recent weakness, with worries about Turkey leading to potentialsafe-haven buying.
Shares of European banks with exposure to Turkey sold offsharply Friday, and weakness in the country’s currency intensified. There areworries about President Tayyip Erdogan’s influence on monetary policy worseningrelations with the U.S. There are also concerns whether indebted companies inTurkey will be able to pay back loans taken out in euros and dollars duringheavy borrowing to fund a construction boom.
Fifteen market professionals took part in the Wall Streetsurvey. Ten respondents, or 67%, called for higher prices, while three, or 20%,said lower. Two respondents, or 13%, predicted a sideways market.
Meanwhile, 694 voters responded in an online Main Streetsurvey. A total of 311 respondents, or 45%, predicted that gold prices will behigher next week. Another 271 voters, or 39%, said gold will fall, while 112,or 16%, see a sideways market.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral For the trading week now winding down, 50% of Wall Streetvoters were bullish while 57% of Main Street respondents were bearish. Justbefore 11 a.m. EDT, Comex December gold was nearly flat for the week, gaining90 cents so far to $1,224.10 an ounce.
“We should be up,” said Phil Flynn, senior market analystwith at Price Futures Group. “With hedge funds massing major short positions,any weakness in the dollar could be met with a very large short-coveringrally.”
Ralph Preston, principal with Heritage West Financial,also said higher. “The $1,200 weekly support level is holding for now - lookingfor a bounce,” he said.
Sean Lusk, director of commercial hedging with WalshTrading, looks for some safe-haven demand, particularly amid worries aboutTurkey’s economic picture and a spillover impact on Europe. A Financial Timesreport Friday said the European Central Bank is worried about exposure ofEuropean banks to Turkey. Lusk also looks for seasonal buying to pick up soon aheadof the so-called autumn wedding season in India.
“I don’t know how bullish the story is [for gold], butit’s certainly not bearish,” Lusk said. “From that, you might get some shortcovering...Combined with some seasonal buying, we could start to work higher.”
Daniel Pavilonis, senior commodities broker with RJOFutures, also looks for gold to get a bid from the Turkey story.
“The dollar is pretty strong [which hurts gold],” hesaid. “But with everything going on in Turkey, we might see some flight toquality in metals. So I think they’ll be up.”
Jim Wyckoff, senior technical analyst with Kitco, saidthe market is “due for a corrective bounce and the currency turmoil should atleast limit downside, if not boost, safe-haven demand.”
Meanwhile, Kevin Grady, president of Phoenix Futures andOptions LLC, said he remains bearish.
“We’ve had three [longtime daily] lows this week,” hesaid. “I still think we are going to see a test of the $1,200 level.”
The one factor that could reverse this, however, would beif U.S. President Donald Trump does something to try to move the U.S. dollarhigher, Grady added.
Richard Baker, editor of the Eureka Miner Report, alsosaid gold is heading lower.
“Gold finds itself just another embattled currency as theTurkish lira and Russian ruble tumble,” he said. “It has not demonstrated itsusual safe-haven appeal as financial distress spreads in emerging-marketeconomies. However, as the U.S. dollar index scores a level not seen since Juneof last year, the yellow metal has shown resilience around $1,220 level formost of August with only a few brief but scary dips.”
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.