(Kitco News) – Main Street remains bullish while Wall Street is split on the short-term direction of gold prices, according to the Kitco News weekly gold survey.
Sixteen market professionals took part in the survey. Seven respondents, or 44%, called for gold prices to rise over the next week. Another six voters, or 38%, looked for gold to fall, while three, or 19%, called for a sideways market.
Meanwhile, 677 voters responded in an online Main Street survey. A total of 463 respondents, or 68%, predicted that gold prices would be higher in a week. Another 145 voters, or 21%, said gold will fall, while 69, or 10%, see a sideways market.
For the trading week now winding down, 69% of Wall Street voters and 82% of Main Street voters were bullish. Shortly before 11 a.m. EDT, as Comex June gold was down 0.7% for the week so far to $1,337.90 an ounce.
“At the end of the day, we are probably going to be higher because of geopolitical risks, inflation risks and concerns about possible sanctions on Russia and Iran,” said Phil Flynn, senior market analyst with Price Futures Group.
Charlie Nedoss, senior market strategist with LaSalle Futures Group, sees gold rising on a view that a rally in the dollar index will run out of steam.
“The dollar has been on kind of a run. I see resistance overhead in the dollar [index],” Nedoss said. “North of 90, you will start to see resistance.”
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management,
said “it is only a matter of time” before gold makes a convincing upside breakout.
“There are several fundamental factors supporting the move higher: despite interest rates in the U.S. moving higher, the dollar has failed to follow, a significant divergence indicating dollar weakness ahead; political and geopolitical factors, in Washington and in the Middle East, in particular support gold; and the Fed and other banks are likely to lag inflation moving higher, which is also positive for gold,” Day said.
Sean Lusk, director of commercial hedging with Walsh Trading, also said higher, suggesting that dips will be buying opportunities.
“There are too many questions marks,” Lusk said. “I don’t see the market turning over.”
Meanwhile, Adam Button, managing director of ForexLive, sees gold falling.
“The rise in Treasury yields argues against holding gold in the week ahead,” he said. “With 10-year Treasuries paying nearly 3%, yield is beginning to be a factor.”
Bob Haberkorn, senior commodities broker with RJO Futures, sees gold falling but only slightly, with nervousness about equities helping to keep a floor under the market.
“The geopolitical fears seem to be subsiding,” he said. “We are a week past the Syrian situation [allies firing missiles]. The situation on Korea seems to be getting better and better.”
Ken Morrison, editor of the newsletter Morrison on the Markets, still looks for the metal to test a downside chart level not reached this week.
“It’s been a featureless week, essentially sideways consolidation,” Morrison said. “The market didn’t get to my $1,330 downside target for the week but with the dollar strengthening, I’ll look for that $1,330 trendline support to be tested next week.”
Robin Bhar, metals analyst at Societe Generale, is among those who see a sideways market.
“It’s just trapped in a very tight trading range,” he said. “Bullish factors are offsetting the bearish factors.”