A majority of participants in Kitco News’ weekly gold survey look for the price of the metal to rise next week.
Out of 33 participants, 18 responded this week. Eleven see prices
up, while five see prices down and two see prices sideways or
unchanged. Market participants include bullion dealers, investment
banks, futures traders and technical chart analysts.
Last week, a majority of the survey participants said they looked
for prices to decline this week. As of 11:30 a.m. EDT Friday, Comex gold for June delivery was up $11 for the week to $1,305.30.
“I am slightly bullish for next week,” said Kevin Grady,
president of Phoenix Futures and Options LLC. “Gold has held its old
resistance level of $1,277 -- now support -- perfectly. The key for me,
however, is that the gold forward rates have gone into backwardation.
This basically is telling us that the price sensitive physical buyers
have once again entered the market.
“The $1,270 support level is still a pivotal number for us;
however, it is important to note that we have seen a tremendous amount
of liquidation from the longs this past week so I would anticipate less
sell stops upon a breach of that support level.”
Adrian Day, president and chief executive officer of Adrian Day
Asset Management, also looks for higher prices, commenting that the
previous correction lower, after Federal Reserve Chair Janet Yellen’s
mid-March comments about interest rates, was overdone.
“A correction was overdue, given the geopolitical premium in the
price in early March, but now the correction has run its course,” Day
said. “Yellen’s comments were misunderstood, and Yellen herself has
backtracked. Gold is due for a rally.”
Ralph Preston, principal with Heritage West Financial, looks for a pullback based on the technicals, however.
“Unless the market closes back over $1,320 in the coming days,
the market will have a disposition to test the $1,250-$1,260 support
zone,” he said. “Barring a Russian incursion into the Ukraine or deeper
into Eastern Europe or some other unforeseen event, gold should
technically float lower.”
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By Allen Sykora of Kitco News; asykora@kitco.com
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