Gold futures are heading for their third weekly rise in a row, and Wall Street and Main Street look for the metal to make it four straight next week, based on the Kitco News gold survey.
A number of factors underpinned gold this week, including geopolitical tensions between the U.S. and Saudi Arabia after news reports that journalist Jamal Khashoggi disappeared after going into the Saudi consulate in Istanbul on Oct. 2. Italy is butting heads with the European Union as Italian officials push for a larger budget deficit than allowed by euro-zone rules. Also, U.S. equities have had periodic bouts of weakness and volatility lately.
Fourteen market professionals took part in the Wall Street survey. Eleven respondents, or 79%, predicted higher prices by next Friday. There were no bearish votes, while three respondents, or 21%, looked for a sideways market.
Meanwhile, 526 people responded to an online Main Street poll. A total of 316 respondents, or 60%, called for gold to rise. Another 124, or 24%, predicted gold would fall. The remaining 86 voters, or 16%, see a sideways market.
Charlie Nedoss, senior market strategist with LaSalle Futures Group, looks for gold to get more of a safe-haven bid. Previously, the metal had struggled to draw safe-haven flows for much of the last several months.
"The environment is a little different now," Nedoss said. "We have the geopolitical stuff. You look at Italy and Europe….The market is taking that as the canary in the coal mine for the rest of Europe."
Data overnight shows China's economic growth is softening, and there are worries about a potential "tech wreck" in U.S. technology stocks, Nedoss said. Further, Bitcoin's troubles this year means the cryptocurrency is no longer taking as many safe-haven flows away from gold. And, Nedoss said, the technical charts are encouraging, with the December futures pressing up against the 100-day moving average at $1,233.70 an ounce.
Meanwhile, Kevin Grady, president of Phoenix Futures and Options LLC, went from being bullish a week ago to neutral after gold's recent rise. Gold futures appear to be hitting some resistance around the 100-day moving average, he said.
"I think we need a close above $1,250.50 to see another wave of new longs enter the market," Grady said.
Reference: Kitco
Read More: https://www.kitco.com/
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