Gold Expected To Gain Some Luster After Fed
(Kitco News)- Wall Street and MainStreet both look for gold prices to rise next week, based on the weekly KitcoNews gold survey.
The U.S. Federal OpenMarket Committee meeting is widely expected to hike interest rates another 25basis points next week. But that hasn’t deterred analysts, who suggest this isalready factored into prices.
Eighteen marketprofessionals took part in the Wall Street survey. Thirteen respondents, or72%, predicted higher prices. There were two votes, or 11%, calling for lowerprices, while three respondents, or 17%, were neutral or looked for a sidewaysmarket.
Meanwhile, 374 peopleresponded to an online poll. A total of 215 respondents, or 57%, called forgold to rise. Another 105, or 28%, predicted gold would fall. The remaining 54,or 14%, see a sideways market.
Wall Street
Bullish
Bearish 
Neutral VS
Main Street
Bullish Bearish Neutral For thetrading week now winding down, 59% of Wall Street voters and 52% of Main Streetrespondents were bullish. Around 11:20 a.m. EDT, Comex December gold was up amodest 0.1% for the week so far to $1,202.60 an ounce.
“I think the Fed maymoderate forward language, so I continue to be constructive on the gold price,”said Peter Hug, global trading director for Kitco Metals.
Jasper Lawler, head ofresearch at London Capital Group, said that while the price action looks soft,positioning and market sentiment support higher prices. He said if the FederalReserve maintains its current guidance, then gold will rally, as he wouldexpect the U.S. dollar to weaken.
“After the strong rally wehave seen in the U.S. dollar, the market needs something more than Fed’s currentsteady path for interest rates,” he said. “From a risk/reward standpoint, thegold market looks good at these levels.”
Darin Newsom, anindependent technical analyst, cited chart-based factors, particularly for theU.S. dollar. Gold tends to move inversely to the greenback.
“Given this week’s bearishbreakdown by the U.S. dollar index, gold could trade higher next week,” Newsomsaid. “With the USDX [U.S. dollar index] hitting a new four-week low this week,December gold could take out last week’s high of $1,218 and possibly challengeits four-week high of $1,220.70.”
Adam Button, managingdirector of ForexLive, is also bullish.
“Gold has likely bottomedfor the year,” Button said. “The market is growing more upbeat on global growthand less worried about trade, despite the risks. That backdrop should weigh onthe U.S. dollar and lead to a slow recovery in gold.”
Ralph Preston,principal with Heritage West Financial, lists a target of $1,226,commenting that he is looking for “an accelerated move out of the recentcongestion.”
Meanwhile, Kitco seniortechnical analyst Jim Wyckoff said he looks for gold to be steady to lowersince “charts remain bearish.”
Richard Baker, editor of the EurekaMiner Report, is also short-term bearish, listing an $1,190 target.
“The Dow Jones IndustrialAverage and S&P 500 are opening to set new intraday highs,” he said. “Asianstock markets bounced overnight with the MSCI AP posting over a 1% gain. Thisis a very bearish headwind for gold prices as investors move away from safehavens to risky asset classes. Gold has been in a downward channel relative tothe S&P 500 since the presidential election - 470 market days - a toughtrend to break.”
Kevin Grady, president ofPhoenix Futures and Options LLC, described himself as neutral on prices at themoment.
“The higher interest-ratepicture is keeping a lid on gold,” he said. “There is a big short [bearish] positionin gold. A lot of people are looking to buy the bottom in gold. I don’t see areason to do that unless you’re looking for a short-covering rally.”
Sean Lusk, director ofcommercial hedging with Walsh Trading, sees gold steady but choppy.
“Rallies continue to gethit,” he said, pointing out that gold climbed to a weekly high early Friday butpromptly fell some $10, which was disconcerting for bulls. He later added, “Itjust doesn’t seem to me like we can get a run.”
By Allen SykoraFor Kitco News
Follow @AllenSykora
asykora@kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.