Main Street Bearish On Gold For Fifth Straight Week; Wall Street Slightly Bullish

By Paul Ploumis 06 Jul 2015 Last updated at 05:44:52 GMT

(Kitco News) - With gold prices hitting their lowest level in three and one-half months Thursday, it might not be surprising that retail investors remain negative on the yellow metal for the fifth straight week.

A weaker-than-expected June nonfarm payrolls report only managed to push gold prices off their session lows as the market prepares to end the second consecutive week in negative territory.

The weekly Kitco News Wall Street vs. Main Street Weekly Gold Survey, which was conducted a day earlier because of U.S. Independence Day, shows once again that a clear majority of retail investors are bearish on gold next week; at the same time, market experts remain in almost in a tie.

This week 211 people participated in Kitco News’ online survey. Of those voters, 119 people, or 56%, expect to see lower gold prices next week; 62 participants, or 29%, expect to see higher prices next week. Thirty people, or 14%, are neutral on the gold market.

For the third week in a row, the market professional survey remains relatively uncertain about gold price in the short term, with the bulls and bears caught in another statistical tie. Out of 33 market experts contacted, 18 responded; of those, eight participants, or 44%, are bullish on gold next week. Seven experts, or 39%, are bearish, and three people, or 17%, are neutral on gold. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Pessimism in the gold market among retail investors has been steadily growing but some do believe that the continued downtrend could be coming to an end.

Geno, from Vancouver, Canada, said that in these current market conditions he is bearish on the gold market.

"I don’t see how gold can rise in these circumstances. Currently paper gold shorts are being dumped into the market at strategic moments,” he said in an email to Kitco News. "At the same time, I do not think that there is far for gold to fall from here pricewise. Of course once paper gold shorts are no longer manipulating the market, I will turn very bullish.”

Bart Melek, head of commodity strategy at TD Securities, said that although the employment data was mildly disappointing, it still doesn’t change expectations that the Federal Reserve will hike rates in September.

"The reality is that any jobs gains over 200,000 is still pretty good,” he said.

Melek added he is expecting prices to remain range-bound and with prices testing the lower end of the range, he is slightly bullish next week, expecting to see a technical bounce. “The fundamentals haven’t changed at all so this would be a purely technical move,” he said.

On the bearish side, Phillip Streible, senior market strategist at RJO Futures, said that investors are becoming more and more disappointed with gold’s inability to rally on market-positive news. He added that geopolitical uncertainty in Europe and Greece should have propelled gold $30 to $40 higher this week.

"I think the only way you are going to make money in the gold market right now is on the downside,” he said. “There is just no reason to buy gold right now.”

Courtesy: Kitco News