Wall Street and Main Street both look for gold prices to rise next week, based on the weekly Kitco News gold survey.
The U.S. Federal Open Market Committee meeting is widely expected to hike interest rates another 25 basis points next week. But that hasn’t deterred analysts, who suggest this is already factored into prices.
Eighteen market professionals took part in the Wall Street survey. Thirteen respondents, or 72%, predicted higher prices. There were two votes, or 11%, calling for lower prices, while three respondents, or 17%, were neutral or looked for a sideways market.
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“I think the Fed may moderate forward language, so I continue to be constructive on the gold price,” said Peter Hug, global trading director for Kitco Metals.
Jasper Lawler, head of research at London Capital Group, said that while the price action looks soft, positioning and market sentiment support higher prices. He said if the Federal Reserve maintains its current guidance, then gold will rally, as he would expect the U.S. dollar to weaken.
“After the strong rally we have seen in the U.S. dollar, the market needs something more than Fed’s current steady path for interest rates,” he said. “From a risk/reward standpoint, the gold market looks good at these levels.”
Darin Newsom, an independent technical analyst, cited chart-based factors, particularly for the U.S. dollar. Gold tends to move inversely to the greenback.
“Given this week’s bearish breakdown by the U.S. dollar index, gold could trade higher next week,” Newsom said. “With the USDX [U.S. dollar index] hitting a new four-week low this week, December gold could take out last week’s high of $1,218 and possibly challenge its four-week high of $1,220.70.”
Adam Button, managing director of ForexLive, is also bullish.
“Gold has likely bottomed for the year,” Button said. “The market is growing more upbeat on global growth and less worried about trade, despite the risks. That backdrop should weigh on the U.S. dollar and lead to a slow recovery in gold.”
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