With none of the three categories in this week’s Kitco News Gold Survey earning more than half the total of number of participants, there is no clear majority outlook for next week’s trend in the gold market, although there are a few more bulls than bears or neutral participants.
In the Kitco News Gold Survey, out of 32 participants, 21 responded this week. Of those 21 participants, nine see prices up, while seven see prices down, and five are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
Survey participants who are bullish said that the recent break in prices is finding support at current levels, with gold likely to rebound to test $1,700 an ounce, perhaps as soon as next week. A few suggested that some market participants may consider taking profits in the current rally in equities and buy gold at these reduced levels, which will support prices.
Those who are bearish are generally citing technical-chart patterns for the move, suggesting that the current weakness is not quite over yet. Many suggest that gold futures prices will find support in the $1,625 to $1,600 area.
The volatile price swings continue to keep a few survey participants on the sidelines, waiting for clearer directions to be established.
Frank Lesh, futures analyst at FuturePath Trading, said gold will be trapped in a wide range for the intermediate term, with $1,600 the lowest support and $1,760 the highest ceiling, and is calling for a sideways trade. “The bond markets and gold were spooked by the threat of rising interest rates and potential loss of the easy money that the Fed has been providing to the markets. Dollar strength - that will come with rising interest rates - will remain a problem for gold….Interest rates will not be rising any time soon, but this past week tells us how powerful that threat will be….Futures traders will now use gold as a short-term trade rather than a position trade,” he said.
Source; http://www.kitco.com/kgs/goldsurvey_march16.2012.html
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