Author: Paul Ploumis15 Jun 2015 Last updated at 06:07:23 GMT
(Kitco News) - For the second consecutive week, investors and market professionals see lower gold prices next week and the outlook is very decisive.
The gold market appears to be ending its three-week losing streak as prices have managed to trend mostly higher after bottoming out last week; however, despite some momentum early in the week, prices were unable to push above $1,200 an ounce, which appears to be reacting to some negative sentiment in the marketplace.
The results of Kitco News’ Wall Street vs Main Street Weekly Gold Survey, show that a strong majority expect to see lower prices next week. In Kitco’s online survey, 421 people voted and of those 297, or 71%, said they were bearish on gold in the short-term; 75 participants, or 18%, were bullish and 49 people, or 12%, were neutral.
The results of the professional survey were also fairly conclusive. Out of 34 market experts contacted, 20 responded; of those, 12 participants, or 47%, see lower prices, five experts, or 25%, see higher prices and three, or 15%, are neutral on the gold market. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.
According to the comments from market professions the biggest risk to the gold market is the Federal Open Market Committee (FOMC) meeting, which kicks off Tuesday with the central bank’s monetary policy statement and updated economic forecasts to be released Wednesday.
“The Fed will reassert a hawkish outlook and may even put a July hike on the table, weighing heavily on gold and boosting the U.S. dollar,” said Adam Button, currency analyst at Forexlive.com
However, the one positive in the marketplace remains the uncertain geopolitical situation in Europe as Greece is still unable to secure a new funding deal among its European creditors. Talks hit a major snag Thursday when the negotiating team from the International Monetary Fund walked away from the negotiations.
Adrian Day, president of Adrian Day Asset Management said because of the economic uncertainty, gold’s recent drop is overdone.
“Everyone expects the Europeans to extend and pretend, but the risk of a sudden shock still exists, so gold has more unexpected upside than downside in the near term,” he said.
Jeffrey Nichols, managing director of American Precious Metals Advisors and senior economic advisor for Rosland Capital, is neutral on the gold market and expects prices to continue to swing back and forth between within it current trading range.
“The market has lost momentum in all direction,” he said.
Courtesy: Kitco News