Following last week’s surge in gold prices, the majority of analysts in the weekly Kitco News Gold Survey expect prices to continue to rise.
In the Kitco News Gold Survey, out of 35 participants, 24 responded last week. Of those 24 participants, 14 see prices up, while eight see prices down, and two see prices moving sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
Many of the participants were encouraged by the unprecedented demand in the physical gold market and the influence that’s had on lifting benchmark futures prices. Because of the $100-plus an ounce rebound from last week’s lows, they see values marching higher.
“(I expect the) continuation of (a) recovery rally after (an) extreme and abnormal sell-off. The reaction of the physical market to the sell-off suggests that, far from a capitulation signaling the end of the bull market, demand remains very powerful,” said Adrian Day, president, Adrian Day Asset Management.
There others who are bullish, but said the speed of the rallies should be watched carefully. “I remain short-term positive, but get nervous at the $1,520-$1,530 level, if we get there quickly,” said Mark Leibovit, editor of the VR Gold Letter.
Those who see prices weaker said the strong bounce off of last week’s lows isn’t sustainable. “I’m bearish for next week. I see prices going back down to $1,425. We had a nice run-up, but now we’re liquidating,” said Adam Klopfeinstein, market strategist with Archer Financial Services.
The few participants who were neutral or expected range-bound prices said the market might just be in a holding period for the time being.
“The physical buying that has alleviated pressure on the paper gold markets, including the G-Sax (Goldman Sachs) retreat, will probably slow down due to speculative, margin long positions entering the futures and forward market leaving them exposed for a mini-short raid less pronounced and less orchestrated than the last bloodbath,” said Bill Goldman of 3GF Corp.
Allen Sykora contributed to this survey.
By Debbie Carlson of Kitco News firstname.lastname@example.org