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(Wallace Refiners) – The gold market continues to see strong bullish momentum, and this time it’s from investors fleeing the high volatility in cryptocurrencies, according to the latest results from the Wallace Refiners Weekly Gold Survey.
In the previous survey, analysts were looking for gold to regain its 200-day moving average at $1,850 an ounce. This week, both retail investors and Wall Street analysts remain bullish on the precious metal as the price continues to climb to its next target at $1,900 an ounce.
“The tide has turned, and people are moving back into gold, aided by recent cryptos pyrotechnics and the never-ending spending plans from Washington,” said Adrian Day, president of Adrian Day Asset Management, who said he was bullish on gold for next week.
This week, 15 analysts participated in Wallace Refiners’ gold survey. Of those, 11 analysts, or 73%, said they were bullish on gold; at the same time, three analysts, or 20%, said they were bearish on prices next week. One analyst, or 7%, said they see gold prices trading sideways.
Meanwhile, a total of 1037 votes were cast in online Main Street surveys. Of these, 716 respondents, or 69%, looked for gold to rise next week. Another 154 respondents, or 15%, said lower, while 167 voters, or 16%, were neutral.
The bullish sentiment comes as the gold market ends the week with nearly a 2% gain as prices managed to hold critical support above $1,850 an ounce.
Adam Button, chief currency strategist at Forexlive.com, noted gold’s strong momentum in the face of renewed strength in bond yields.
“The market reactions to the US CPI report and taper talk in the Fed Minutes was telling. There were some major hiccups, but they did nothing to derail the trend of dollar weakness and gold strength,” he said. “That’s a great sign of underlying demand for gold.”
Colin Cieszynski, chief market strategist at SIA Wealth Management, said that he expects gold to continue to benefit from investors move away from cryptocurrencies. He added that the technical picture does not show that the precious metal is overbought.
Marc Chandler, managing director at Bannockburn Global Forex, said that he also doesn’t see an overly stretched market even if momentum indicators are starting to firm.
“Weekly momentum indicators are head up and suggest any near-term pullback is a buying opportunity,” he said.
Chandler added that the next major level to watch is $1,900 an ounce.
However, not everyone is convinced that gold prices can move higher, and the market could be due for some consolidation after the early-week breakout.
Darin Newsom, president of Darin Newsom Analysis, said that unless the gold market can make a new one-week high next week, it could be headed back down to retest support at $1,850 an ounce.
“The contract looks to be in a position to establish a short-term downtrend, with the trigger being a move below its previous 4-day low,” he said.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Wallace Precious Metals The author has made every effort to ensure accuracy of information provided; however, neither Wallace Precious Metals nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Wallace Precious Metals and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.