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(Kitco News) – Sentiment continues to improve in the gold market even as the price turns neutral, unable to get any lasting traction after another month of disappointing labor market data.
Kitco News’ latest weekly gold survey shows Wall Street analysts and Main Street retail investors are solidly bullish on gold in the near term.
Ole Hansen, head of commodities strategy at Saxo Bank, said the precious metal continues to tread a fine line even as the Federal Reserve is expected to change monetary policies and start cutting monthly bond purchases ahead of the end of the year.
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This week, 14 Wall Street analysts took part in the Kitco News gold survey. Of the participants, eight, or 57%, called for a rise in gold prices. At the same time, five analysts, or 36%, called for a drop in gold prices next week. One analyst, at 7%, was neutral on gold in the short term.
Meanwhile, a total of 841 votes were cast in Main Street’s online polls. Of those, 442 respondents, or 53%, believed gold would rise next week. Another 265, or 32%, said lower, while 134 voters, or 16%, were neutral.
Sentiment in the gold market among retail investors has steadily improved after falling to a multi-month low last month. However, the improvement in sentiment comes as gold prices remain chained to hold at $ 1,750 an ounce. Disappointing employment figures in September helped push gold prices to a two-week high; however, the market failed to break initial resistance above $ 1,780 per ounce.
December gold futures traded for the last time at $ 1,759.20 an ounce, roughly unchanged from last week.
Some analysts have said that while the Federal Reserve will inevitably cut back on bond purchases, weak labor market data could give gold short-term momentum as investors push back when the Fed eventually reduce its monthly bond purchases.
“Once the Fed actually begins its tapering – if it ever does – the market will see that it is too little too late, and – as it usually does once the Fed starts to tighten – gold will go down. and will reverse. He did so in 2005, 2013 and 2015, ”said Adrian Day, President of Adrian Day Asset Management.
Colin Cieszynski, chief market strategist at SIA Wealth Management, said he could see gold prices rise in the near term as the US dollar loses some momentum ahead of the Reserve’s monetary policy meeting federal government next month, especially as uncertainty over the reduction begins to increase.
However, not all analysts are convinced that gold is ready to break its chains right now. VR Metals / Resource Letter editor Mark Leibovit said he views the current price action as a dead cat rebound.
Marc Chandler, managing director of Bannockburn Global Forex, said he expects gold price resistance between $ 1,780 and $ 1,800 in the near term.
“I don’t think the disappointment in jobs matters in the sense that I see the Fed going down again next month. The disappointment has also really pushed down long-term US yields, including in the futures market. federal funds, which sets more than 25 in September 2022, “he said.
Adam Button, chief currency strategist at Forexlive.com, said he is waiting for another gold washout before looking to buy. He added that he doesn’t expect to buy gold until November, when the market will see strong seasonal factors.
“Right now you have to be patient if you want to buy gold. I want to buy when there are panic sales,” he said.
Disclaimer: The opinions 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 the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.
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