(Kitco News) – Gold has huge upward momentum in the mean time, and that left members within the weekly Kitco gold survey overwhelmingly anticipating costs to maintain rising subsequent week as a result of mixture of chart-based momentum and ongoing worries in regards to the coronavirus outbreak.
The metallic soared to a seven-year excessive on Friday, fueled by the continued unfold of the virus around the globe and prompting worries this may dent financial development. Some observers additionally cited expectations for persevering with gentle financial coverage within the U.S. and elsewhere.
Early this week, many members in a variety of markets took the “ostrich strategy” – sticking their head within the sand and never worrying in regards to the outbreak, mentioned Charles Nedoss, senior market strategist with LaSalle Futures Group. However because the week wound down, threat sentiment was dinged and gold took off.
“It looks like it [the virus] is getting worse,” Nedoss mentioned. “It confirmed up in Korea and Japan. You are listening to extra speak of it hitting the economic system – clearly journey and tourism.”
A serious expertise firm – Apple Inc. – this week issued a warning that gross sales will fall wanting its forecast for the present quarter for the reason that virus has weakened each manufacturing and demand in China.
April gold generated technical follow-through this week when the metallic broke above the earlier excessive for the 12 months of $1,619.60 hit again on Jan. 8, when the fear was that the U.S. and Iran would possibly go to conflict.
“We have obtained a development going,” mentioned John Weyer, co-director of business hedging with Walsh Buying and selling. “I do not see something that is going to cease it.”
Of course, a contrarian would say when expectations in any market are this one-sided, the entire potential near-term shopping for or promoting could have already occurred, that means the market might find yourself going the opposite means.
Fifteen market professionals took half within the Wall Avenue survey. Fourteen, or 93%, known as for gold to rise. Just one voter, or 7%, known as for costs to fall, whereas no person was impartial.
In the meantime, 1,121 votes have been solid in an internet Major Avenue ballot. A complete of 820 voters, or 73%, regarded for gold to rise within the subsequent week. One other 192, or 17%, mentioned decrease, whereas 109, or 10%, have been impartial.
In final week’s survey for the buying and selling week now winding down, 65% of Wall Avenue and Major Avenue voters have been bullish. Simply earlier than 11 a.m. EST, Comex April gold was up by $59.40, or 3.7%, for the week thus far to $1,645.80 an oz.
“I am bullish for subsequent week,” mentioned Kevin Grady, president of Phoenix Futures and Choices LLC. “Gold’s rally is sort of spectacular, particularly within the face of a surging U.S. greenback. The coronavirus statistics popping out of China are getting worse. Till we begin to see the tide flip, gold ought to maintain a bid.”
Phil Flynn, senior market analyst with at Value Futures Group, commented that gold is in “breakout mode,” thus, he sees extra beneficial properties forward.
“Gold has gotten a lift as a result of China continues to take measures to stimulate the economic system and defend it from the coronavirus,” Flynn mentioned. “Additionally, the doomsday-buying impact can also be in play because the coronavirus is inflicting some actual worry and conspiracy theories.”
Afshin Nabavi, head of buying and selling with MKS, mentioned gold is now poised to run greater towards $1,650 and $1,675. Nevertheless, he added, “a little bit of correction to the draw back can be wholesome” for the gold market.
Richard Baker, editor of the Eureka Miner’s Report, mentioned gold doubtless “will march inexorably in the direction of $1,800” since “we have not seen the worst from the coronavirus.” He listed a goal of $1,680 for Comex gold subsequent week.
“As gold hits seven-year highs, it’s attention-grabbing to notice the Japanese yen has weakened to ranges not seen since April 2019,” Baker mentioned. “Coronavirus instances in Japan have basically eliminated its foreign money from safe-haven standing….As a consequence, the lustrous metallic and U.S. Treasurys have develop into the worldwide safe-haven of alternative as 10-year yields strategy the September lows of final 12 months throughout the U.S.-China commerce negotiation brouhaha.”
Jim Wyckoff, senior technical analyst with Kitco, mentioned the gold market’s technical posture “turned extra bullish this week” and the coronavirus impression on world economic system “is perceived to be getting worse.”
Adrian Day, chairman and chief government officer of Adrian Day Asset Administration, additionally mentioned greater.
“It is not solely concern about [the] coronavirus, however buyers are more and more trying for some insurance coverage, together with towards a unstable inventory market,” he mentioned.
Disclaimer: The views expressed on this article are these of the writer and should not replicate these of Kitco Metals Inc. The writer has made each effort to make sure accuracy of knowledge offered; nonetheless, neither Kitco Metals Inc. nor the writer can assure such accuracy. This text is strictly for informational functions solely. It isn’t a solicitation to make any trade in commodities, securities or different monetary devices. Kitco Metals Inc. and the writer of this text don’t settle for culpability for losses and/ or damages arising from using this publication.