After pushing through resistance at the $1,650 (U.S.) an ounce level, basis the December gold futures at the Comex division of the New York Mercantile Exchange, a majority of participants in the weekly Kitco News Gold Survey see gold prices building on the gains.
In the Kitco News Gold Survey, out of 32 participants, 24 responded this week. Of those 24 participants, 13 see prices up, while five see prices down, and six are neutral or see prices moving sideways. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
Those who see higher prices said momentum could push values up, with a trip to $1,700 possible. Also, gold might try to hold its firmer tone ahead of the Federal Reserve confab next week in Jackson Hole, Wyo., as gold bulls hope Fed Chairman Ben Bernanke will tip his hand to show if there is any timeframe for possible stimulus. After this week's Federal Open Market Committee meeting minutes for August were released, gold price rallied on thoughts the Fed was inching closer to action.
Those who see weaker prices said they expect some sort of retracement after this week's gains, especially if there are no soothing words from Bernanke.
Jimmy Tintle, owner, GreenKey Alternative Asset Services, said while another round of quantitative easing could be implemented, the question is when. "I don't think the Fed is going to make any extreme moves (on) inflation until after the election and most likely not until 2013. This will put some bearish pressure back on gold," Tintle said. "Reports from the U.S. have shown some stability in the economic recovery and I think the Fed understands this. The one report that may show a little more evidence in how the economy is looking going forward is September's employment report. This will be a key report for me and probably many others on whether the Fed will release QE 3 before the end of the year."
Those who are neutral on gold said they expect gold to consolidate at current levels after the sizable run up in prices this week.
Allen Sykora contributed to this survey