Friday February 28, 2014 : Survey Participants Turn Bearish On Next Week's Gold Market Direction

The majority of market participants in the weekly Kitco News Gold Survey forecast weaker gold prices for next week as several suggested gold is due for a pullback.

In the Kitco News Gold Survey, out of 33 participants, 19 responded this week. Six see prices up, while 12 see prices down and one sees prices trading sideways or 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 $1 an ounce on the week.

Several survey participants forecast lower gold prices for next week, saying that the yellow metal is due for a correction.

“Gold (is) to trade lower in the week ahead, with a target around $1,300,” said Ken Morrison, editor of online newsletter Morrison on the Markets. “It's not so much a call on gold as it is a belief commodities in general are set up for a pullback. Bullish sentiment on the CRB Index reached the highest level since April 2011 this week and (a) number of markets are showing signs of 'buyer-fatigue' as we close out the week,” Morrison said.

A few others point out a lack of physical buying in Asian markets as prices rose will hamper gold rallies.

Participants who see higher prices said the near-term technical-chart trend remains fairly robust. Also, unrest in several emerging market countries underpins gold.

“The trend is up because of Ukrainian problems with the Russians, emerging-nations worries as the U.S. cuts back on stimulus, a return to a weaker trend in the U.S. dollar and fears that the stock markets are running into resistance. In the long run, this trend could get quite dramatic if the massive amounts of stimulus funds are allowed to get into the public’s hands…. Short term, the market may be a little overbought but if the Russians get antsy about the situation in the Ukraine, they could step up their pressure in a more physical way,” said Bob Tebbutt of ARMOUR Asset Risk Management.

(Kitco News)