Monday, 21 October 2019
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Wall St., Main St. Still See Gold Bull Running Strong
Monday, 25 February 2019 16:52 WIB | GOLD CORNER |GOLDGold OutlookGold Corner

Wall Street and Main Street are unequivocally bullish on gold in the near term as the precious metal saw strong gains this past week, culminating in a 10-month high.

Although prices are ending the week off their highs, many analysts have noted that gold held important initial support levels, a good indication that prices still have room to move higher in the near term.

"I don™t think this move is done," said Sean Lusk, director of commercial hedging with Walsh Trading.

This week, 20 market professionals took part in the Wall Street survey. There were 15 votes, or 75%, calling for higher prices. Three participants, or 15%, were bearish for next week. Two participants, or 10%, were neutral on the yellow metal.

Meanwhile, 734 respondents took part in an online Main Street poll. A total of 413 voters, or 56%, called for gold to rise. Another 192, or 26%, predicted gold would fall. The remaining 129 voters, or 18%, saw a sideways market.

In the last survey, 76% of Wall Street and 56% of Main Street participants were bullish on gold for the current week.

Looking ahead, analysts have said that they are bullish on gold both fundamentally and technically.

"Everywhere investors look, they see problems in the world and that is going to continue to lead to save-haven demand," said George Gero, managing director at RBC Wealth Management. "Investors need a hedge because of all the unexpected headlines that continue to pop up."

Chris Vecchio, senior currency strategist at DailyFx.com, said that even though selling pressure pushed gold off its recent 10-month highs, the price has held above its 21-day moving average since mid-November.

"As far as I™m concerned, as long as this three-month trend remains in place, I am bullish on gold," he said. "Structurally, the market is technically sound."

Ole Hansen, head of commodity strategy at Saxo Bank, said that he remains bullish on gold in the near term even if the market does see some profit-taking at elevated prices.

"It makes sense to see some traders reduce their position as gold test critical resistance levels," he said. "However, global economic uncertainty should weigh on stocks and that will ultimately drive investors looking for diversification to gold."

Despite the overall optimism in the marketplace, some analysts are warning investors to be careful buying at current levels.

Darin Newsom, independent technical analyst, said that momentum indicators show that gold is current in overbought territory.

"If April gold closes near its weekly low ($1,323.30 early Friday), it would establish what looks to be a spike reversal. Along with that, weekly Stochastics would have established another bearish crossover above the overbought level of 80%, all indicating the secondary (intermediate-term) trend has turned down again," he said.

Mark Leibovit, editor of the VR Gold Letter, said that he thinks gold has.

"The sector tends to top out just ahead of or in coincident with [Prospectors & Developers Association of Canada conference] in Toronto," he said.

Source: Kitco

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