Wall St., Main St. Look for Bounce in Gold Prices
Monday, 4 May 2020 12:06 WIB |
GOLD CORNER |Gold CornerGold Outlook
Wall Street and Main Street were both undeterred by last week™s pullback in gold, calling for the metal to rise this week, according to the weekly Kitco News gold survey.
Wall Street is not as heavily bullish as a two week ago, when 80% of the respondents were bullish. However, the majority of the bears in this week™s survey say they actually remain constructive in the long term, but figure there is a chance for the current correction lower to continue for a while yet.
Nine out of 15 Wall Street voters, or 60%, said they are bullish for this week. Five voters, or 33%, called for lower prices, while one, or 7%, was neutral.
Meanwhile, 1,750 votes were cast in an online Main Street poll. A total of 943 voters, or 54%, looked for gold to rise in the this week. Another 505, or 29%, said lower, while 302, or 17%, were neutral.
Richard Baker, editor of the Eureka Miner™s Report, said some end-of-month activity played a role in gold™s tumble on Thursday and suggested the yellow metal will return to $1,700 per ounce or higher this week, with silver following to $15.14 per ounce.
œWhy? The environment that [Apple chief executive] Tim Cook describes is one where gold thrives -- uncertainty driven by the viral influence of COVID-19 on global markets, Baker said. œInterest rates are still favorable; the Bund remains underwater and is now rejoined by France and Japan after the latter two have enjoyed marginally positive 10-year rates for some time. Although U.S. 10-year inflation expectations remain low, real rates are still negative.
Phil Flynn, senior market analyst with at Price Futures Group, is also among those who see gold bouncing. œI think gold™s ECB setback [on Thursday] should be forgotten about this week as the focus returns to global economic stimulus, Flynn said.
Sean Lusk, co-director of commercial hedging with Walsh Trading, said he looks for higher prices for the week, commenting that while prices may eventually ease some more, he looks for buying to emerge on the dips. He listed chart support around $1,675 and $1,625 an ounce.
œHigher, said Adam Button, managing director of ForexLive. œThe late-week fall in gold has left it close to support at $1,659 and that should be a springboard for a rise back above $1,700.
Meanwhile, Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, said he looks for gold to ease some more even though he personally does not plan to be a seller.
œGold could slide more after its strong run-up from the mid-March crash, as the economy begins to open up, bringing with it some optimism, perhaps largely misplaced, Day said. œNonetheless, that is generally positive for stocks, and negative for gold in the near term. So down this week, but we certainly are not selling; given the very positive fundamentals and huge upside, it would be a mistake to try to capture an extra dollar or two at the risk of missing the next move up.
Charlie Nedoss, senior market strategist with LaSalle Futures Group, also said he looks for gold to come down and test the 50-day moving average near $1,654 an ounce, likely to be hurt by dollar strength, even though he said he remains bullish on the metal for the long term.
œThursday was a disappointing day. We had an outside day [on the technical charts], he said. œWe closed through the 10- and 20-day moving averages.
Mark Leibovit, publisher of VR Metals/Resource Letter, described himself as bearish for this week.
œLooking for a seasonal pullback, he said. œAlso thinking deflationary forces may surprise the bulls. Just a hunch. Too many thinking inflation.
Kevin Grady, president of Phoenix Futures and Options LLC, was the neutral vote for this week.
œThere are reports of Venezuelan gold sales by the Bank of England, he said. œAlthough this may be putting pressure on the market, I still believe that the global expansion of central-bank balance sheets will ultimately be very positive for gold.
Source: Kitco News