Kitco News’ latest weekly gold survey shows a majority of Wall Street and Main Street forecasters see higher prices next week (March 11-17). Most surveyed participants are calling for either higher or sideways price action in the precious metal.
Christopher Vecchio, the Director of Futures & Forex at Tastylive.com, believes gold will trade sideways. “Simply buy on the dip until trends change, as there are no indications that gold’s trending patterns will turn anytime soon.”
Adrian Day, Chairman of Adrian Day Asset Management, predicts gold will continue to rise. “The demand is coming into gold, with new buyers entering the market outside of central banks, from individual investors and institutions.”
Ole Hansen, Head of Commodity Strategy at Saxo Bank, is among the few analysts with a bearish view this week. He says, “Gold will decline next week as the precious metal needs a consolidation after the recent rally.”
Sean Lusk, the Director of Commercial Hedging at Walsh Trading, believes all the signs indicate this rally is being driven by active buying.
He says, “China is quietly shoring up the market, adding gold to their reserves. Many central banks are buying to support their currencies. This is still happening. There is a lot of unpredictability globally, and that’s the key.” He also cites geopolitical tensions in recent years as having an impact on the precious metal.
Lusk mentions that even though gold is at all-time highs, there is still room for further upside. The strange thing in the market is that all other metals have declined, energy is down, and only gold is up. Walsh Trading’s targets are $2,175 per ounce, which is a 5% increase for the year. And after gold surpasses this level, Lusk believes that performance could double, reaching $2,278 per ounce, a 10% increase. “Gold needs to gain another $90 to reach that level. But two weeks ago, no one thought we could reach $2,175 at this point, so it really is a possibility.”
In this week’s Kitco News Gold Survey, 14 analysts participated, and optimism reigned. Six experts, or 43%, are calling for higher prices next week. Meanwhile, 43% forecast sideways and 14% forecast lower prices.
In the meantime, 296 votes were cast in Kitco’s online survey with the majority of retail investors also predicting more upside for gold. Of 173 retail traders, 58% expect gold to rise next week. Meanwhile, 23% forecast the decline and 19% remain neutral.
Key data points to watch next week will be the U.S. CPI and PPI reports for February, retail sales report, and initial jobless claims.
Darin Newsom, Senior Market Analyst at Barchart.com, thinks gold could see some correction. He says, “It looks like April gold could have a short-term down trend. Essentially, the Fed Chair has indicated no expectations for a rate cut at the March FOMC meeting (March 19,20), meaning the dollar may remain stable for a while.
Chris Vecchio, the Director of Futures & Forex at Tastylive.com, says this is just the beginning of gold’s recovery. He says, “People are talking about gold in all-time highs in terms of the USD, but it’s also all-time highs against every other currency. It’s not just a story about the U.S. dollar. It’s a global issue that’s supportive of the market. Gold seems to be moving with forecasts of low rates around the world. At the same time, debt levels are rising to unprecedented levels everywhere.” Gold has hit $2,200 per ounce after disappointing U.S. employment figures. Although the U.S. economy created 275,000 jobs in the previous month, it was significantly lower than January and December figures last year. Meanwhile, the unemployment rate climbed to 3.9% and wages increased less than anticipated. Employment data reduced concerns about inflation and created a favorable environment for the Fed to cut interest rates in June. As a result, traders bet against the U.S. dollar and gold benefits from this.
Reference: Kitco News
