Every Friday, we compare the Friday PM London gold fix with the Monday AM fix, and see how well the experts in the Kitco and Bloomberg gold surveys did. Both sources poll a collection of bullion dealers, market analysts, money market managers, investment bankers and hedge fund managers every Friday for their forecast for the the week ahead.
Last week, 50% of Bloomberg respondents, and 68% of Kitco respondents predicted gold to rise this week. Gold saw a big spike on Thursday over the possibility of the nation of Cyprus going bankrupt, but gave up most of that in Friday trading. The Monday AM London gold fix for March 18 was $1,599.50, and the Friday PM gold fix for March 22 was $1,607.75, giving gold a miniscule $8.25 gain for the week.
This week, Kitco had 28 people respond to their Friday gold survey. 22 of the 28, a massive 78% see gold heading higher next week. Only two respondents see gold resuming range-bound action, and only four see gold giving up its gains.
Bloomberg received only 25 responses to their survey today, with but the bulls swell their ranks from 50% last week to 64% this week. 16 of the 25 experts expect gold prices to rise. Seven people (28%) see gold falling, and only two see sideways trading ahead.
Major bullish factors for gold next week concern continued jitters over Cyprus, whether the EU bails them out on Monday or not, a the spectre of depositors losing their money is now front and center for many Europeans. If there is a bailout, that is billions more euros poured into the system. If there isn’t a bailout, people will be running for safe haven assets such as gold.
Major bearish factors are the fact that gold could not break the $1,620 mark despite “Cyprus Doom,” and the U.S. stock market showing little to no signs of a major correction.
Factors contributing to a range-bound outlook is the fact that for the last two weeks, we have first had a “perfect storm” for bears to crush gold but failing, then this week major supporting factors for the bulls, but them failing break convincingly into the upside. For some reason, gold seems determined to remain in a very sticky range, with only small shifts up or down before resuming sideways trading.