Wall St., Main St. Look For Gold To Retain Luster
(Kitco News)- WallStreet and Main Street both look for gold’s newfound upward momentum tocontinue next week, based on the Kitco News gold survey.
Equitiessold off sharply Wednesday and Thursday. Even though the stock market was upFriday morning, the prior weakness left gold higher for the week as investorsturned to the metal as a safe haven. The dollar index also eased this week,further fueling gold’s ascent.
Fourteenmarket professionals took part in the Wall Street survey. Eleven respondents,or 79%, predicted higher prices by next Friday. There were two votes, or 14%,calling for lower prices, while one respondent, or 7%, looked for a sidewaysmarket.
Meanwhile,527 people responded to an online Main Street poll. A total of 355 respondents,or 67%, called for gold to rise. Another 99, or 18%, predicted gold would fall.The remaining 73 voters, or 14%, see a sideways market.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral Forthe trading week now winding down, 56% of Wall Street voters and 51% of thoseon Main Street were bullish. As of 11:02 a.m. EDT, they were right. Comex Decembergold was up 1.2% for the week so far to $1,220.10 an ounce.
KevinGrady, president of Phoenix Futures and Options LLC, flipped from bearish tobullish for the week ahead.
“Goldbroke out of some key technical levels yesterday,” Grady said. “This morning’sprelim[inary] open interest is showing 27,000 new longs [bullish traders] inthe market. I am a little bullish for the coming week because I think youshould see some more short covering as well as new longs entering the market.”
KenMorrison, editor of the newsletter Morrison on the Markets, also looks for moreupside, describing Thursday’s biggest daily price gain of the year as a “hugeday for gold.” Further, the metal closed above resistance at $1,220, whererecent rallies have stalled.
“Importantlyit did so on the highest volume since June with open interest rising nearly30,000 contracts, indicating new buyers dominated the flow,” Morrison said.“It's important to keep in mind managed funds entered the week near a recordnet-short. The big jump in open interest indicates they were not activelycovering positions....I expect gold aims for near $1,240 over the next week.”
AdrianDay, chairman and chief executive officer of Adrian Day Asset Management, alsosaid higher.
“Withbonds, equities, and the dollar down, this is a perfect environment for someinvestors to buy gold as a hedge,” he said. “Of course, we expect some recoveryin the markets next week, which may see gold give back some of its gains, butit has bottomed.”
TwoKitco participants in the poll had mixed views. Jim Wyckoff, senior technicalanalyst, said he foresees more strength since “charts have turned way morefriendly.”
However,Peter Hug, global trading director of Kitco Metals, was one of two surveyparticipants who see a potential for a modest price pullback over the nextweek.
“Ifwe can create some stability in the equity markets, I would expect a modestlystronger dollar, which should create a small bias to the downside for gold,” hesaid.
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.  |