Weaker Gold Prices Expected Next Week Say Survey Participants
San Francisco (Sept 12) Gold prices are expected to fall next week, say a majority of participants in the weekly Kitco News Gold Survey, as a stronger dollar and an outlook for eventually higher interest rates weigh on values.
Out of 37 participants, 24 responded this week. Of those, five see higher prices, 18 see lower prices and one sees prices trading sideways. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.
Last week, survey participants were slightly bearish. As of 11:30 a.m. EDT, Comex December gold was down about $37 for the week.
Charlie Nedoss, senior market strategist at LaSalle Futures Group, said gold’s close under $1,240 an ounce earlier this week was a bearish trigger. Further, he said, the strength in the dollar is weighing on gold, as is the idea the Federal Reserve may start to shift its language next week at the Federal Open Market Committee meeting to focus on eventually raising interest rates.
“I’m not saying that rates will go up next week, but that they’ll be working toward that. And that’s bearish gold,” he said. “Plus the dollar is strong, (interest) rates are rising and while the stock market is softening, it is at record highs. It can fall 30, 60 points and still be good. The only thing gold had going was food and energy inflation, but that’s been taken away.”
Those who see higher prices said the recent gains in the dollar are overdone and that gold is ignoring other global issues such as tensions between Russia and Ukraine and militants fighting in Syria and Iraq.
“The geopolitical situation is tenuous, and that puts a bid under gold. It also drives the dollar up, of course, which is negative for gold, but the geopolitical situation is likely to help gold more than the dollar,” said Adrian Day, chairman and chief executive officer, Adrian Day Asset Management.