SURVEY: Gold Prices Anticipated to Increase Next Week
Don’t call it a comeback.
Participants in a recent survey believe gold prices are positioned to make a comeback next week as prices are expected to rise. Out of 36 participants, 14 see gold prices going up, while six see the precious metal to decline and three believe prices will remain unchanged, according to the Kitco News Gold Survey.
Participants included bullion dealers, investment banks, future traders and technical chart analysts.
On Friday, Comex December gold was up about $15 an ounce for the week as a stronger dollar and rising open interest in the futures market continue. Gold has finally reached the all-important $1,200 an ounce level.
“Gold is back at $1,200, an important level for this year, partly due to the (Comex) option expiration on Monday,” said Frank Lesh, Broker and futures analyst with FuturePath Trading.
“Lower interest rates for the world’s largest consumer of physical gold (China) should certainly boost demand there and has supported gold for this move higher. (U.S.) dollar strength remains a problem for gold though and if the dollar holds current levels, gold will not be able to rally much more. I view gold as range bound and I am back to a neutral position. Gold is a great short-term trading vehicle right now. Not so much for long-term positioning.”
The price for gold is expected to rise ahead of the Nov. 30 Swiss gold referendum, where voters will begin deciding whether or not the Swiss National Bank needs to increase its gold holdings, among other requirements.
The referendum, if passed, will mean that The Swiss National Bank must hold 20 percent of all assets as gold, repatriate the 30 percent of their gold held abroad by England and Canada, and discontinue selling any gold they accumulate.
“I expect some apprehension from sellers and excitement from buyers in the lead-up to the Swiss referendum. No one will want to be short heading into the vote, even if the polls show a clear lead for the ‘no’ side,” said Adam Button, editor, analyst at Forexlive.com.
The positive momentum of gold comes after China announced a surprise rate cut and the European Central Bank started acquiring asset-backed securities to expand its program to stoke inflation and revive the bloc’s weak economy.
