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General Market Commentary
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General Precious Metals
Wall St., Main St. expect gold prices to keep on shining
(Kitco News) - Wall Street and Main Street look for gold prices to continue their recovery in the week ahead.
The precious metal sold off sharply at the end of last week when a stronger-than-forecast report on U.S. nonfarm payrolls led to improved optimism about the economy. However, the metal rose sharply this week as buying emerged on the price dip and accelerated around mid-week when equities corrected sharply lower and Federal Open Market Committee policymakers indicated that they don’t envision hiking interest rates any earlier than 2022.
Of the 14 Wall Street professionals who took part in this week’s survey, none predicted gold would fall next week. Ten, or 71%, called for higher prices, while four respondents, or 29%, were either neutral or said they expect a sideways market.
A total of 1,285 votes were cast in an online Main Street poll. Of these, 792 respondents, or 62%, looked for gold to rise in the next week. Another 308, or 24%, said lower, while 185, or 14%, were neutral.
In the last survey for the current trading week now winding down, Wall Street leaned bearish while Main Street was bullish. Around 11 a.m. EDT on Friday, Comex August gold was $64.50 higher for the week so far to $1,747.50 an ounce.
“I think it will be slightly higher, although it will struggle to get over that 18 handle [$1,800],” said Bob Haberkorn, senior commodities broker with RJO Futures.
Sean Lusk, co-director of commercial hedging with Walsh Trading, said gold will be “definitely up” for as long as the Federal Reserve keeps pumping money into the economy.
“They’re going to stimulate the economy the best they can through bond buying and other QE [quantitative-easing] measures. Until that gets unwound, why would you be short [in] metals?” Lusk asked rhetorically.