Survey Participants Expect Higher Prices For Gold Next Week

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Friday June 29, 2012 12:13 PM
A majority of participants in the Kitco News Gold Survey said gold prices may rise next week, gathering support from a strong rally on Friday.
In the Kitco News Gold Survey, out of 33 participants, 24 responded this week. Of those 24 participants, 14 see prices up, while four see prices down, and six are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
Gold jumped on Friday after news out of the EU Summit to help recapitalize weak eurozone banks and that rally impressed many survey participants.
“The better-than-expected outcome of this week’s EU summit has resulted in a significant relief rally today. If this news is followed by new European resolve and encouraging Chinese economic data this weekend, the rally should extend into next week for not only gold but also key global commodities oil and copper,” said Richard Baker, editor of the Eureka Miner Report, who looked for gold to rise to about $1,610 an ounce.
Several others said the move made by officials during the EU Summit flagged the beginning of more accommodative monetary policy out of Europe which is ultimately bullish for gold.
Not everyone thought Friday’s rally would have legs, however. Those who were bearish on prices or were neutral in their views said while gold might try to take a stab over the $1,600 level, the metal doesn’t have enough gumption to push through the heady resistance at the $1,640 area. Some suggested that gold could rise, only to retreat back to current levels between $1,590-$1,600 or fall back to at least $1,550.
Ken Morrison, editor and founder of online newsletter, Morrison on the Markets summed up a prevailing bearish view.
“Technically, this is an important period for gold. Thursday's test of support at $1,550, while holding, was on such low volume, those types of tests tend not to be sustained over time. I envision the market getting to but failing at $1,620, resulting in chart pattern of successively lower highs. The next time down to $1,550 will also fail with my intermediate target at $1,500 over the next two to four weeks,” he said.

By Debbie Carlson of Kitco News; dcarlson@kitco.com
Allen Sykora contributed to this survey. Kitco.com