Gold Prices Seen Higher Next Week, But Participants Divided

Gold prices could be higher next week if there is a positive outcome from European summits, a very slim majority of participants in Kitco News’ weekly gold survey said, but survey members were fairly divided on the outlook.

In the Kitco News Gold Survey, out of 34 participants, 24 responded this week. Of those 24 participants, 11 see prices up, while 10 see prices down and three see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.

Participants who see higher prices next week said they expect that policy-makers at the European Union have their back against a wall regarding the sovereign-debt crisis and that the urgency to get something accomplished will mean a rally for gold. Also, they point to the Indian festival season as another support for gold on the physical side.

Those who see weaker prices said technical charts look weak, with $1,700 an ounce providing strong resistance and $1,600 weak support. “Many traders were looking for a move to $1,729, which is half way back in the $1,923 to $1,535 range and shows that this market is weaker than expected and lacks a catalyst for price appreciation,” said Frank Lesh, broker and futures analyst at FuturePath Trading.

Those who are neutral point to the extreme volatility in gold prices – and markets in general – as keeping them on the sidelines.