Wall St., Main St. Look For Gold Upside To Continue
(Kitco News)- Wall Street and MainStreet look for gold to maintain its upward momentum next week, with the metalcurrently headed for its fourth straight weekly gain, based on the Kitco Newsgold survey.
Eighteenmarket professionals took part in the Wall Street survey. Twelve respondents,or 67%, predicted higher prices by next Friday. Just one respondent, or 6%,called for lower, while five participants, or 28%, looked for a sidewaysmarket.
Meanwhile, 444 peopleresponded to an online Main Street poll. A total of 291 respondents, or 66%,called for gold to rise. Another 106, or 24%, predicted gold would fall. Theremaining 47 voters, or 11%, see a sideways market. The overall response wasthe lowest since Kitco News began the online survey more than three years ago.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral For the trading week nowwinding down, 79% of Wall Street voters and 60% of those on Main Street werebullish. Just before 11 a.m. EDT, Comex December gold was 0.9% higher for theweek so far at $1,240 an ounce.
“I am bullish for nextweek,” said Kevin Grady, president of Phoenix Futures and Options, commentingthat the metal broke above the 100-day moving average around $1,231 this week.“I am looking to test the 38% Fibonacci retracement at $1,253.10.
“We are starting to seesome new longs entering the market at these levels as well. Today's preliminaryopen interest, based on yesterday's trading, is up 19,000. I think a settlementabove $1,253 should bring in a new wave of longs.”
Phil Flynn, senior marketanalyst with at Price Futures Group, also looks for further gains.
“Gold is getting boostedby risk aversion and outright fear buying,” Flynn said. “With global stockmarkets under extreme pressure, gold is being used as risk aversion. Even asthe dollar gains strength, gold is breaking out, which usually bodes well forgold prices going forward.”
George Gero, managingdirector with RBC Wealth Management, also looks for higher prices, saying“stock volatility is a wakeup call for asset allocators.”
Sean Lusk, director ofcommercial hedging with Walsh Trading, sees upside potential in gold amidpotential headwinds for equities, such as upcoming U.S. midterm elections. Hesuggested that in the not-too-distant future, gold has a chance to hit atrendline that currently passes near $1,265 and a 50% Fibonacci retracementaround $1,268. He added that the net-short position of money managers meanspotential for short covering as these traders buy to unwind those bearish bets.
Meanwhile, Adrian Day,chairman and chief executive officer of Adrian Day Asset Management, looks forgold to pull back, given the rise in the U.S. dollar. Still, he pointed outthat gold has held up better than dollar movement would suggest.
“This is a positive signfor medium/longer term, but suggests a pullback in immediate term,” Day said.“All this is subject to some surprise, with the risks all on the upside forgold.”
Philip Streible, seniormarket strategist with RJO Futures, said gold’s ability to shake off a slightlyhigher-than-forecast 3.5% reading in U.S. third-quarter gross-domestic-productgrowth shows that “this buildup in prices is built on a strong foundation. Thenext upside target is $1,250, while caution would be justified if we see abreak below $1,220.”
Ken Morrison, editor ofthe newsletter Morrison on the Markets, suggested gold could make another blipupward but spend most of the next week sideways.
“Participation in gold hascertainly improved along with a more balanced sentiment as evidenced by thelarge jump in open interest Thursday to 495,000 contracts, the largest openinterest since July,” Morrison said.
“Despite the dollar indexreturning to the August high, gold managed to rally and test overheadresistance at $1,240. I won't be surprised if gold makes a run toward $1,245 inthe week ahead, but I expect most of the trade will remain range-bound$1,230-$1,240 in the near term. Closing below $1,230 might embolden potentialshort sellers.”
Colin Cieszynski, chiefmarket strategist at SIA Wealth Management, said he is neutral on gold for nextweek although he’s bullish over the next month.
“I just think that havingmoved up quite a bit already, gold may need a week to digest its recent gains,”he said. “Plus, the U.S. dollar has been showing signs of life off the U.S. GDPreport, which could hinder the short-term upside for gold.”
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.  |