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(Kitco News) – With gold prices resisting strong above $ 2,000 an ounce, the market has become a two-way street and price action could be quite volatile as short-term sentiment continues to fall, according to the latest results of the Kitco News Weekly Gold Survey.
In fact, investors might just be better off flipping a coin. The decline in sentiment comes as gold that the gold market is preparing to see is second week of loss after a hit of a half time.
This week, 15 Wall Street professionals took part in this week’s interview. The sentiment was evenly distributed among the bulls and the bears, with each side receiving 7 votes as 47%. One analyst, as 7%, expected prices to trade silk.
Among retail investors, Kitco’s online survey saw the largest turnout on record. However, sentiment has fallen to its lowest level since the beginning of the year.
A total of 2,830 votes were cast in an Main Street online poll. Of these, 1,596 respondents, or 56%, were looking for gold to go up in the following week. Another 702, as 25%, said lower, while 532 voters, as 19%, were neutral.
Last week, as gold saw its biggest weekly decline since March, both Wall Street analysts and Main Street looked for prices to recover. Gold, however, prepares at the end of the week with a modest loss; December gold futures traded last at $ 1,945.80 an ounce, 0.15% down from last Friday.
The selling pressure in the precious metals market began in earnest on Wednesday, after the Federal Reserve disappointed the market with the minutes of its monetary policy meeting in July. The gold market could not find traction after the US Federal Reserve did not provide new guidance on interest rate expectations and said it saw no benefit to rising interest rates.
Ole Hansen, head of commodity strategy at Saxo Bank, said that in the full term the price action of gold by the US dollar will be thickened. He added that weakness in the US dollar is at unusual levels and may come for a short-term correction. He also said the minutes could provide some new momentum for the beat-up dollar.
“We are seeing dollar positioning at extreme levels and these positions are currently depressing,” he said. “That makes bullish gold position depress in the short term,” he said.
Although volatility is expected to pick up in the gold market, many analysts hold to their persistent bullish forecasts.
Hansen added that gold prices will continue to be well supported, because “there are still a lot of dark clouds hanging over the economy.”
Afshin Nabavi, head of trading with MKS (Switzerland) SA said he is bullish on gold as the market seems to find solid support above $ 1,920 per ounce. He added that the fundamental background of gold has not changed. “We’re just seeing more two-way trading.”
Many analysts have said that after the solid run of gold above $ 2,000 an ounce, a consolidation period and lower prices would be healthy.
“Some consolidation around $ 1,900 could be instrumental in creating a more stable market,” said Eugen Weinberg, head of commodity research at Commerzbank. “It would be good to shake some of the weaker hands out of the market and we can build a solid base.”
Lukman Otunuga, senior research analyst at FXTM, said he is bearish on gold in the near future because the precious metal has lost the battle with the US dollar this week; he added, however, that the war would continue.
“All eyes will be on how prices around $ 1900 will react. If this level proves unjustified support, Golden declines could expand before bulls could potentially re-enter the scene.
Adrian Day, Chairman and CEO of Adrian Day Asset Management, was the lone neutral voice in this week’s survey. He said gold is coming for a correction, but the market continues to see unusual demand as dips are bought.
“There is still a lot of money on the sidelines to invest,” he said.
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 the accuracy of the information provided; however, neither does Kitco Metals Inc. nor can the author guarantee such accuracy. This article is strictly for informational purposes only. It is not solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article does not accept any liability for loss and / or damage resulting from the use of this publication.
