Gold Prices to Drop Further on US Dollar Strength
London (Sept 27) Gold prices are set to drop next week as the prospect of a stronger US dollar, buoyed by a strengthening US economy, is expected to weigh on the precious metal.
Twelve of 20 analysts polled in a Kitco Gold Survey said they expected gold prices to trade lower next week, four predicted that prices will rise, and four forecast prices to trade sideways.
The annual October "Golden Week" holidays in China, which increase demand for gold in the world's leading consumer, and the US non-farm payrolls data for September are likely to influence prices next week.
Charlie Nedoss, senior market strategist at LaSalle Futures Group, told Kitco: "It's got a bit of a negative profile here.
"The dollar is weighing on it. It's still under the 10-day (moving average), which is about $1,224.80 [£753.93, €965.62] (basis the December futures). It's ridden that all the way down. I can't really start to get excited until it can get over that. And the 20-day is at $1240.21."
George Gero, senior vice president of RBC Capital Markets Global – Futures and a precious metals strategist, said: "If gold rallies, money managers may be incentivised to allocate gold. But if the stock market is steady and… yields (rise), those (are negative) for gold. But all of this could be helpful for silver because it's a more industrial precious metal."
Source: ibTimes.UK