Friday June 15, 2012 12:16 PM
Higher gold prices are expected next week by the majority of participants in the Kitco News Gold Survey, with many expecting the situation in Europe to draw buyers to the metal.
In the Kitco News Gold Survey, out of 33 participants, 23 responded this week. Of those 23 participants, 18 see prices up, while three see prices down, and two are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
The Greek elections are the focal point for market participants and while the outcome is a mystery since there have been no survey polls conducted for the past two weeks, many said they believe the pro-bailout parties will win. This could trigger a gold rally.
Carlos Perez-Santalla, Precious Metals Broker, PVM Futures, said even though gold already has built in a Greek premium, “solutions point north.”
Many who see higher prices on a pro-bailout party winning said European officials will need to come to some solution to help Greece, which will mean some sort of stimulus or monetary easing.
Others pointed to technical charts. Darin Newsom, Telvent DTN senior analyst, said he looks for the August gold contract “to finish its short-term uptrend between $1,631 and $1,663 an ounce.”
Those who see weaker prices said people are too optimistic over the Greek elections. They expected a flight-to-safety move to the dollar and not gold, to be the result, similar to when problems rose in Europe. A trip back to the $1,580 might not be out of the question, they say.
Those who are neutral said given the Greek elections and the Federal Open Market Committee meeting next week, where the Fed may or may not launch monetary stimulus, they felt the safest place is on the sidelines.
“With all the political and economic news coming out over the weekend and early next week, I really don't see a major move one way or the as one can trump the other. It is one of the weirdest weekends that traders have to deal with,” said Jimmy Tintle, owner, Green Key Asset.
By Debbie Carlson of Kitco News;