Gold tells an intriguing tale today. It cratered right after the jobs numbers were released but struggled back to even as the day wore on. At close it was up about $5 per ounce on speculative buying.
Gold hit a low of $1,335.66 an ounce in the wake of data showing that U.S. non-farm payrolls increased by 287,000 jobs last month, the largest gain since October. That sent the dollar to a two-week high against the euro and reignited talk that the U.S. Federal Reserve could lift interest rates this year.
"The knee-jerk reaction to the stronger than expected payrolls data has been lower, but you're already seeing gold bounce off the lows," UBS analyst Joni Teves said.
"There are still a lot of people out there who want to buildgold positions, and will be keen to come in on any retracements."
A total of 19 analysts and traders took part in Kitco’s survey of market professionals. Eleven, or 58%, are calling for higher prices next week. Six, or 32% expect prices to fall, while two, or 11%, are neutral.
Meanwhile, on Main Street, 1,090 participants submitted votes in an online and Twitter survey this week. A total of 698 respondents, or 64%, said they were bullish for the week ahead, while 275, or 25%, were bearish. The neutral votes totaled 117, or 11%.
A week ago, 65% of retail participants and 71% of Wall Street participants were bullish on gold. This was the fifth straight week both Main Street and Wall Street looked for higher prices, and for the fifth straight week they were right.
Bank of America Merrill Lynch released a report not only calling for gold prices to hit $1,500 an ounce but for silver to “overshoot” to $30.
“We reinforce our bullish view particularly on gold and silver, which should continue to perform well given subdued global growth and risks that this will skew the public debate towards wealth generation/ distribution, populism and migration, with all the negative consequences this may have on effective economic policy making,” the report said.
"The world has been walking from crisis to crisis and we see risks that this may not change," the analysts added.
His near-term target for the precious metal is $1,400
The BoAML analysts claimed they called gold’s bottom in February and the resulting chaos following Britain’s vote to leave the European Union reinforced their call. “As such we are upgrading next year's gold price forecast from $1,325 per ounce to $1,475 per ounce."
Reference: KITCO, Reuters
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