Sentiment in the gold market is slowly shifting back to the bullish side as the precious metal’s resilience in the face of rising bond yields shines through. However, some analysts are warning that there is still insufficient momentum to push gold prices through critical resistance levels.
The latest Kitco News Weekly Gold Survey shows a slightly bullish tilt among Wall Street analysts, while sentiment among Main Street retail investors is evenly balanced. The rise in optimism comes after two weeks of bearish sentiment in the marketplace.
The improved outlook also comes as gold prices see slight positive gains for the week, ending a three-week losing streak with price holding support above $1,900 an ounce. August gold futures last traded at $1,933.30 an ounce, up 0.20% from last week.
Kevin Grady, president of Phoenix Futures and Option, said that in the current environment, gold has room to move higher in the near term. However, he added that a lack of clarity from the Federal Reserve on the future path of its monetary policy is keeping a lot of investors on the sidelines.
“Gold investors are in a holding pattern,” he said. “There is a lot of congestion between $1,945 and $1,955, and if we are going to get above that area to bring some confidence back into the market. To do that, we need some clarity from the Fed. If they say they are done raising rates, then I think gold has a chance to get back to $2,000.”
This week, 19 Wall Street analysts participated in the Kitco News Gold Survey. Among the participants, ten analysts, or 53%, were bullish on gold in the near term. At the same time, five analysts, or 26%, were bearish for next week, and four analysts, or 21%, saw prices trading sideways.
Meanwhile, 483 votes were cast in online polls. Of these, 182 respondents, or 38%, looked for gold to rise next week. Another 181, or 37%, said it would be lower, while 117 voters, or 24%, were neutral in the near term.
According to the survey, retail investors see gold prices pushing to $1,941 an ounce by the end of next week.
Ole Hansen, head of commodity strategy at Saxo Bank, said that he is bullish on gold as the market is ending the week above an important initial resistance point, even as yields on 10-year bonds pushed back above 4%.
“Having survived having the kitchen sink thrown at it, it will be interesting to see whether gold can find some fresh momentum above 1930 next week and will that force some additional short covering,” he said.
Adrian Day, who has been neutral on gold in the near term recently, now sees more upside potential for the precious metal as weaker unemployment data supports growing expectations that the Federal Reserve is quickly coming to the end of its tightening cycle.
Earlier Friday, the Bureau of Labor Statistics said that 209,000 jobs were created in June, missing expectations as economists were looking for job gains of around 224,000.
“The latest U.S. jobs number, though heralded as strong, were actually below estimates, but the market is now resigned to another rate hike this month,” Day said. “This is priced in now, and the market can slowly regain some of the recently lost ground. Gold still has further to go on the recovery from the late June sell-off.”
Marc Chandler, managing director of Bannockburn Global Forex, said he sees gold prices testing resistance at $1,955 an ounce this week.
Written by Neils Christensen for KITCO ~ July 7, 2023
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Please allow me to introduce myself; I am Jeffrey Bennett, President of Kettle Moraine, Ltd., the parent of Sierra Madre Precious Metals.
I have been married for 53 years with two children and four grand-children, a veteran of Viet Nam, student of history (both American and film), and was host for fifteen years of Perspectives on America on the alternative airwaves, covering such subjects as, health and wellness, news, political satire, education and editorial commentary on current events through the teaching of history, and Protecting Your Wealth. In early 2018, I took a several month hiatus to complete some family business but returned to airwaves April 17, 2018).
At the age of ten, I sat in a bank-vault in the Citizens Bank of Mukwanago, Wisconsin with my grandfather going through bags of old American Peace dollars, hand-selecting each coin as dated rolls of 20 coins were carefully put together and rolled. Learning of the history of these beautiful pieces of Americana, I asked my grand-father, "Why are we doing this?" to which he replied, "Because someday they are going to do the same thing with the silver in our money that, that (S.O.B.) Roosevelt did with gold in 1933." It took only six-years for his prediction to come to pass at the hands of a disciple of Roosevelt's... and what will a Federal Reserve 'dollar' purchase today - and what will that old 90% Silver Peace Dollar purchase?
Although at the age of ten, there was little understanding of the meaning of it all, over the next half-century I became well-versed on the subject matter. During this summer of my education, I began to purchase silver coins as a collector and some small, international gold coins two years later - not an easy feat in the shadow of the Roosevelt confiscatory policies of 1933. Although those policies remained in effect until the mid-1970's, it was not until 1991 that I found that one could make a living providing precious metals and collectible, historic numismatic coins to a willing and concerned clientele.
It was also during that year, that I began a relationship with one of the first Trust companies to give the public access to gold and silver as part of an Individual Retirement Account (IRA) - and Kettle Moraine, Ltd., founded in 1995, but have ceased providing service due the the intense change-over of the provider.
In November 2011, after a 15 month broadcast on another network, I returned to the airwaves with my then revamped program, Life, Liberty & All That Jazz, and for over 28 years, I have been proud to serve the family of listeners of my numerous broadcast programs for physically-held precious metals for investors and collectors alike. On March 23, 2020 I launched my brand new - appropriately named program, The Edge of Darkness on the Republic Broadcasting Network, and thus continue to remain available to our long time clients and their families. Ah yes - find out what "inter-generational" wealth provision has done for our clients over the past three decades.
Don't buy the sizzle of that steak until you understand the cost! In other words, don't buy the bull being dispensed by the 'rare coin' pitchmen until you understand the full story. We, at Sierra Madre Precious Metals, will be proud to serve your needs.
