Survey Participants Forecast Lower Gold Prices For Next Week

(Kitco News) - A majority of participants forecast lower gold prices next week in the Kitco News Gold Survey as dollar strength and bearish technical-chart formations weigh on the metal.

Out of 37 participants, 20 responded this week. Of those, four see higher prices, 12 see lower prices and four see prices trading sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Last week, survey participants were bearish. As of 11:30 a.m. EDT, Comex December gold was down about 50 cents for the week.

Those who see weaker prices said there’s little incentive to buy gold in the short-term, with a test of $1,200 an ounce possible.

“It’s got a bit of a negative profile here,” said Charlie Nedoss, senior market strategist at LaSalle Futures Group. “The dollar is weighing on it. It’s still under the 10-day (moving average), which is about $1,224.80 (basis the December futures). It’s ridden that all the way down. I can’t really start to get excited until it can get over that. And the 20-day is at $1240.21.”

Mark Leibovit, editor, VR Gold Letter, said gold has a few things in its favor.

“The market is extremely oversold and I'm recommending continued 'dollar-cost' averaging of positions in both gold and silver. Seasonality is still theoretically positive into February and the sector is probably the most hated investment group, which I like. That said, we have not yet seen strong upside volume to confirm a bottom,” Leibovit said.

A few survey participants who see gold in a sideways trend said after recent losses the market may be trying to consolidate before deciding on its next path.

“Technicals (are) overall bearish, but market is overdone on the downside,” said Jim Wyckoff, Kitco’s technical analyst.

Courtesy: Kitco News