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Survey Participants Divided Over Views On Gold Market Direction Next Week

Friday May 11, 2012 12:03 PM

This week’s sharp sell-off and China’s weak data have survey participants in the Kitco News Gold Survey split on the direction for prices next week.

In the Kitco News Gold Survey, out of 33 participants, 24 responded this week. Of those 24 participants, nine see prices up, while seven see prices down, and eight are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Those who see higher prices said gold is due for a rebound after this week’s sharp losses. Several called gold oversold, along with the broader market.

Those who see weaker prices said there’s little around to support prices at current levels and that momentum is lower. If the Greeks cannot form a coalition government, that will add to uncertainty and weigh on gold prices as the euro falls and the dollar rallies.

Ira Epstein, director of the Ira Epstein division of The Linn Group, said with no new headlines about Iran and given that gold hasn’t been able to rally on the sovereign-debt issues in Europe or politics there, something else happening. “In this case, it’s the (technical) chart action and choices investors are making. Investors are or have moved into bonds, notes, the dollar, yen and at times, stock indices. They are not driving gold or silver prices up…. Ultimately I think gold ends up sharply higher, but not now nor necessarily this summer. Therefore I think opportunity lies on the short side of the market.”

Survey participants who are neutral said they are being cautious and waiting on the sidelines to see how current events play out, regarding Europe’s political issues.

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