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Wall St., Main St. See Gold Benefitting From Technical Momentum

Roughly three-quarters of the respondents in Kitco News’ weekly Wall Street and Main Street surveys look for gold to maintain its upward momentum now that the precious metal has finally pushed above its 200-day moving average.

Kitco Gold Survey

Wall Street

Bullish75%
Bearish6%
Neutral19%

VS

Main Street

Bullish73%
Bearish17%
Neutral10%

Sixteen traders and analysts took part in a Wall Street survey. Twelve voters, or 75%, see gold prices rising by next Friday. One, or 6%, said lower, while three voters, or 19%, were either neutral or expected sideways prices.

Meanwhile, 926 Kitco readers submitted votes in an online Main Street poll. A total of 674 voters, or 73%, are bullish. Another 156, or 17%, say that gold will fall, while 96, or 10%, are neutral.

In last Friday’s survey for the current week, 76% of Wall Street voters and 69% of Main Street voters predicted gold would rise. They were right. Just before 11 a.m. EDT Thursday, Comex June gold was 2.3% higher for the week at $1,286.60 an ounce.

So far in 2017 but not counting the current week, Wall Street forecasters collectively were right nine of 13 times for a winning percentage of 69%. Main Street was 7-6 for 54%.

“We should continue to see a solid bid under the market through the weekend with tensions rising in North Korea and uncertainty with Russian relations,” said Phillip Streible, senior market strategist with RJO Futures. “I would expect a punch through $1,300 and a minor setback just after on profit taking, but all in all prices should remain firm.”

June gold on Wednesday closed above the 200-day average for the first time since early November and has since managed to hold on to most of its gains. As of Thursday, this average stood at $1,268.40 an ounce. Overnight, the metal peaked at $1,290.70, its most muscular level since Nov. 10.

“Gold has broken through some key technical levels -- most particularly 200 MA -- and big-name investors are returning to the gold space they abandoned nearly a year ago,” said Adrian Day, chairman and chief executive officer of Adrian Day Asset Management. “We expect some follow-through, particularly with a heightened geopolitical situation over the Easter holidays.”

Added Phil Flynn, senior market analyst with at Price Futures Group, “Back above the 200-day moving average makes us bullish”

Jim Wyckoff, senior technical analyst with Kitco, also said higher. “Near-term technicals have become even more bullish,” he commented.

Sean Lusk, director of commercial hedging Walsh Trading, said the “path of least resistance looks higher although we will probably have some resistance at the round number of $1,300.”

Kevin Grady, president of Phoenix Futures and Options LLC, described himself as neutral at the moment, characterizing the short-term outlook on gold as “a very difficult call.” The number of Comex open positions has climbed the last two trading days, which he attributes to buying by speculators ahead of the long Easter holiday weekend on geopolitical concerns such as U.S.-North Korea saber rattling and uneasiness about U.S.-Russian relations.

“Nobody wants to be short (bearish) going into the weekend. You just don’t know what is going to happen,” Grady explained. However, he later added, “If you come in Monday and don’t see anything happen (further deterioration of the geopolitical scene)…you could see some profit-taking. I think some people are buying for some insurance over the weekend.”

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