Weekly Gold Analysis Friday March 14, 2014 : Solid Majority Of Survey Participants See Higher Gold Prices Next Week

An overwhelming majority of participants in the Kitco News Gold Survey see higher prices next week as they forecast the yellow metal will build on its safe-haven bids in light of the tensions in Crimea and concerns over China’s economy.

In the Kitco News Gold Survey, out of 33 participants, 25 responded this week. Twenty-one see prices up, while two see prices down and two see prices trading sideways or neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week, most participants were nominally bullish. As of noon EST, Comex April gold prices were up about $47 an ounce on the week.

Gold market participants are watching a vote Sunday in Crimea whether or not to join Russia, although many world powers have said they will not recognize the referendum. Concerns about the Chinese economy are also giving gold a boost after weaker-than-expected economic reports and talk of the possibility of more companies defaulting after a solar panel manufacturer was unable to pay a bond installment.

“We remain positive on gold and we expect it to see more upside movement particularly as the Ukrainian situation becomes more intense. We see the $1,400 level as a major area of resistance and we would take that as our first target level. Also, major concerns for China and bankruptcies - we expect to see more Chinese companies declare bankruptcy as they lack the funds to pay the loans back,” said Adam Hewison, president and chief strategist with INO and MarketClub.com.

Some analysts also said this week’s price movement was bullish from technical analysis perspective as April gold futures broke out of their recent range.

“The April contract has broken through secondary technical resistance at $1,350.20 and could now target major long-term resistance at $1,423.50,” said Darin Newsom, senior analyst at Telvent DTN.

While most survey participants are bullish, they are also cautious.

“Gold will remain well bid so long as the Crimea situation percolates. So, at least for next week, gold is likely to be up. It is perhaps overdue for a correction, so once the Crimea situation calms, it may fall back, but this is unlikely to be any time soon,” said Adrian Day, chairman and chief executive officer Adrian Day Asset Management.

Few survey participants saw weaker prices or were neutral, and cited the chance of gold retreating after this week’s stout rally.

  Source : (Kitco News) - By Debbie Carlson of Kitco News; dcarlson@kitco.com