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Market players feeling bullish on gold after Bernanke speech

ARND WIEGMANN/REUTERS

Comments by Federal Reserve Chairman Ben Bernanke at Friday's Fed symposium in Jackson Hole, Wyo., have many participants in the weekly Kitco News Gold Survey saying they expect higher gold prices next week.

Bernanke said Friday he's open to enact more quantitative easing to help bring down U.S. unemployment. The Fed has a dual mandate to keep inflation under control and stabilize employment.

In the Kitco News Gold Survey, out of 33 participants, 24 responded this week. Of those 24 participants, 15 see prices up, while six see prices down, and three are neutral or see prices moving sideways. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

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With the door opened to more quantitative easing just a little bit more, gold could continue to rally. Spencer Patton, founder and chief financial officer at Steel Vine Investments, said while Bernanke didn't officially offer quantitative easing in his speech today, it's on the table. "Markets and gold should rally on this all next week," Patton said.

Some of those who see weaker prices said gold could encounter some profit-taking after the rally of the past two weeks. Mark Leibovit, editor VR Gold Letter, said while he's ultimately bullish on gold, he said the metal could retreat as far back at $1,625 an ounce.

Participants who are neutral on prices said they expect the market to stabilize around current levels before deciding on its next path.

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