Friday February 14, 2014 : Survey Participants Are Strongly Bullish On Gold Prices Next Week

A vast majority of participants in the weekly Kitco News Gold Survey are bullish on gold prices next week as the yellow metal rises above $1,300 for the first time since November.

In the Kitco News Gold Survey, out of 33 participants, 26 responded this week. Twenty see prices up, while three see prices down and three see prices trading sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week participants were bullish. As of noon EST, Comex April gold prices were up about $54 an ounce on the week.

Most of the survey participants this week who are bullish cite the strong performance gold put in this week as the main factor. Many of them expect gold to build on those gains headed into next week.

“The gold rally has legs with upward momentum established and bouts of short covering from (an) extreme oversold situation likely to continue. With German and French indicators showing more life, the dollar/euro exchange rate could weaken to gold’s advantage,” said Jeffrey Nichols, managing director, American Precious Metals Advisors.

Adrian Day, chairman and chief executive officer, Adrian Day Asset Management, pointed to fundamental reasons.

“News out of Washington this week is very bullish for gold: Fed (Federal Reserve) head (Janet) Yellen was very dovish, and made clear that monetary policy would continue to be very easy, notwithstanding her indication (to) continue the taper; and the Republican Party backed away from a budget fight raising the debt ceiling with a few items of spending attached. Without the discipline of ‘sequester,’ spending and the debt will move back up. And I suspect that in the coming months, the Federal Reserve will ‘taper the taper’... cut back on the monthly reduction or skip a month. That would be bullish for gold,” Day said.

A few survey participants forecast lower prices for next week, suggesting the rally in gold is due for a retreat.

“My upside target for April gold (is) up at $1,326.30, which represents a 10% gain for the year. I think if we achieve it, a good amount of selling pressure coupled with profit taking could come in to the market. Lower for next week,” said Sean Lusk, director of commercial hedging at Walsh Trading.

  Source : (Kitco News)