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(Kitco News) – Gold
prices are expected to climb next week, with expectations that the
yellow metal may catch a bid as the situation regarding a possible
bailout for Cyprus could attract safe-haven buying.
In the Kitco News Gold Survey, out of 33 participants, 28 responded this
week. Of those 28 participants, 22 see prices up, while four see prices
down, and two are neutral. Market participants include bullion dealers,
investment banks, futures traders, money managers and technical-chart
analysts.
For those participants who see higher prices next week, nearly all of them cited the situation in Cyprus and
whether or not European officials will agree to bail out the
near-bankrupt country as the reason for their higher calls. Many expect
that Cyprus will get some sort of bailout, which will support both gold
and the euro currency.
Carlos Perez-Santalla, precious metals broker at PVM Futures, echoed
what many other participants said was another bullish factor for gold.
“Although the Cyprus situation
has not driven demand up yet, the feeling of insecurity of monetary
assets by many Europeans will affect demand soon,” he said.
The majority of participants are bullish, but there a few respondents who said gold’s limited reaction to the Cyprus news
this week doesn’t bode well for the metal. They said they were
surprised that given news that a eurozone country was teetering on the
edge of bankruptcy, gold wasn’t able to take out recent highs, which is
troubling.
“The key number for gold is $1,625. That’s big resistance. Unless we can
close above it, the trend remains down,” said Kevin Grady, president, PhoenixFutures and Options.
The two participants who are neutral on gold said there are too many
unknowns about the Cyprus situation to give an accurate read on where
prices might go next week.
By Debbie Carlson of Kitco News dcarlson@kitco.com