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Bulls or Bears? Wall Street vs. Main Street puts together leading analysts and regular metals investors to find out where they think gold is headed next week. Picked up and quoted by other leading news organizations, this feature has become a cornerstone for the industry and an indicative benchmark.
- Gold trended upward this week, with prices rising over 1% as Federal Reserve chair Jerome Powell signaled on Friday that the central bank will maintain its 2% inflation target and isn’t looking to cut rates any time soon.
The latest Kitco News Weekly Gold Survey shows that most retail investors expect gold prices to post gains during the week ending September 1. Meanwhile, market analysts remain cautious and evenly divided as they head into the last week of August. Adrian Day, President of Adrian Day Asset Management, foretold gold’s downward move on Friday, and he sees the precious metal heading lower next week as well. “Trying to predict, ahead of the Jackson Hole meeting, gold’s likely path after that meeting is a foolhardy task,” Day said. “But here goes: Gold is more likely to be disappointed at Jerome Powell’s speech, as well as those of other central bankers, and will give back last week’s gains. So DOWN.” Day said that he doesn’t expect the disappointment to last very long, however, “as we draw inexorably closer to a US recession and a pause by the Fed, before inflation is beaten.” On the other hand, James Stanley, senior market strategist at Forex.com, sees the precious metal continuing its gains next week. “Gold was surprisingly strong even with the USD strength showing this week, and the culprit for that was weakness in the Euro ,” Stanley said. “US Dollar strength has been astounding given the response to support tests, but Gold has continued to gain even with that backdrop.” Stanley said the technical picture is looking more bullish for gold. “This week saw spot gold break out of a falling wedge and it’s so far held a higher-high and higher-low. It feels like there’s a lot of bears on gold, given the dynamics in the dollar, so I still like the idea of looking for some strength. I’ve got a resistance area at 1925-1932 in the spot and depending on how bulls react there, we may have more room to run. Above that, the 1950 area is pretty thick, so I’m looking for follow-through resistance there if bulls can break through primary resistance.” This week, 12 Wall Street analysts participated in the Kitco News Gold Survey, and they were evenly split on gold’s direction. Five experts, or 42%, expected to see higher gold prices next week, while another five analysts, or 42%, predicted a drop in price. Two analysts, or 17%, were neutral on gold for the coming week. Meanwhile, 559 votes were cast in online polls. Of these, 388 respondents, or 69%, looked for gold to rise next week, 114, or 20%, expect it will be lower, and 57 voters, or 10%, were neutral in the near term.Main Street Bullish Bearish Neutral The latest survey shows that retail investors expect gold prices to trade around $1941 per ounce next week. The coming week will see a raft of significant economic data releases, including job openings, ADP employment and nonfarm payrolls, which will give markets a deep look into the U.S. employment picture. The revised Q2 GDP will also be released, along with the PCE index and ISM manufacturing, which should help investors confirm the Fed’s likely interest rate trajectory as it attempts to balance inflation and growth risks. Marc Chandler, Managing Director at Bannockburn Global Forex, sees gold making gains next week. “I like gold higher next week, thinking that the dollar’s good news is known and a soft jobs report at the end of the next week may encourage the idea that rates have peaked, or nearly so,” Chandler said. Chandler also sees the technical picture improving. “I think there is potential back into the $1930-40 area,” he said. “The momentum indicators have turned up and the model buying may be seen when the 5-day moving average crosses back above the 20-day. Technicals look constructive.” Phillip Streible, chief market strategist at Blue Line Futures, is bearish on the yellow metal. “The market is still in a fairly solid downtrend,” he said. “Prices need to get over 1971 just to turn neutral, but prices are not even able to break above resistance at $1951.” Kitco's own Jim Wyckoff also sees a continuance of gold’s downward trajectory. “Steady-lower as price downtrend remains in place on the daily bar chart,” he said.“It’s increasingly clear that central bank hikes are over,” Button said. “Well, before year-end, the market will be pining for rate cuts and that’s when gold will start to take off. It’s still early, but it’s time to dip a toe into gold.” Gold prices are currently up over 1.3% on the week, with spot gold last trading at $1913.23 an ounce at the time of writing.
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