The latest Kitco News weekly gold survey, shows that both Wall Street analysts and Main Street investors are expecting gold prices to continue to push higher even as the market sees seven weeks of consecutive gains.
Sean Lusk, co-director of commercial hedging at Walsh Trading, said that growing economic uncertainty, a low interest rate environment, and a weaker U.S. dollar are creating the perfect storm for gold prices. He added that the market above $1,900 has hit his 23% target for the year.
“Right now, there is nothing happening in the global economy that says you shouldn ’t own gold,” he said. “The market is completely overbought, but with this momentum, I think we could see prices climb another 10% higher before we see some significant profit taking.”
This week, 14 Wall Street professionals took part in this week’s poll, 11, or 79%, called for gold prices to rise. Two analysts, or 14%, predicted lower prices. Meanwhile, one analyst, or 7%, expected prices to trade sideways.
A total of 1,870 votes were cast in an online Main Street poll. Of these, 1,334 respondents, or 72%, looked for gold to rise in the next week. Another 317, or 17%, said lower, while 219 voters, or 12%, were neutral.
Both Wall Street and Main Street were expecting to see gold push higher for the current trading week and they have not been disappointed. As of 11:37 a.m. EDT on Friday, Comex August gold futures last traded at $1,893 an ounce, up nearly 5% compared to the previous week.
Gold is seeing its best weekly performance since early April as the market was recovering from the COVID-19 selloff in late March.
Looking at the market’s momentum, Eugen Weinberg, head of market research at Commerzbank, said that he would not be surprised if gold prices pushed to $2,000 an ounce by the end of next week. He added that it’s just a matter of time before gold hits that level.
Although gold looks a little overbought, Weinberg, said that the market is supported by strong fundamentals.
“I would not call gold a bubble just yet,” he said. “We still have trillion and trillions of bonds with negative nominal yields and this will continue to support gold.”
Afshin Nabavi, head of trading with MKS (Switzerland) SA, also said that it is only a matter of time before gold prices hit all-time highs after breaking above $1,900 an ounce.
He added that along with continued uncertainty, rising tensions between the U.S. and China will continue to support gold as a safe-haven asset….