Solid Majority Of Survey Participants See Higher Gold Prices Next Week
Friday March 22, 2013 12:08 PM
Gold prices are expected to climb next week, with expectations that the yellow metal may catch a bid as the situation regarding a possible bailout for Cyprus could attract safe-haven buying.
In the Kitco News Gold Survey, out of 33 participants, 28 responded this week. Of those 28 participants, 22 see prices up, while four see prices down, and two are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
For those participants who see higher prices next week, nearly all of them cited the situation in Cyprus and whether or not European officials will agree to bail out the near-bankrupt country as the reason for their higher calls. Many expect that Cyprus will get some sort of bailout, which will support both gold and the euro currency.
Carlos Perez-Santalla, precious metals broker at PVM Futures, echoed what many other participants said was another bullish factor for gold. “Although the Cyprus situation has not driven demand up yet, the feeling of insecurity of monetary assets by many Europeans will affect demand soon,” he said.
The majority of participants are bullish, but there a few respondents who said gold’s limited reaction to the Cyprus news this week doesn’t bode well for the metal. They said they were surprised that given news that a eurozone country was teetering on the edge of bankruptcy, gold wasn’t able to take out recent highs, which is troubling.
“The key number for gold is $1,625. That’s big resistance. Unless we can close above it, the trend remains down,” said Kevin Grady, president, Phoenix Futures and Options.
The two participants who are neutral on gold said there are too many unknowns about the Cyprus situation to give an accurate read on where prices might go next week.
By Debbie Carlson of Kitco News firstname.lastname@example.org