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Analysts make bullish gold predictions after metal gains for three sessions

TradingPub Admin | August 9, 2013

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Several analysts predicted in a recent Kitco News poll that during the week starting on August 12, gold prices will rise.

They made this forecast as the metal increased in value for three consecutive sessions on August 7, 8, and 9, according to MarketWatch. December gold was trading $2.30 per ounce higher at $1,312.20 an ounce on the Comex division of the New York Mercantile Exchange. On the day before, markets responded to strong Chinese trade data by causing the price of gold to rise 1.9 percent.

Chinese data bolsters markets
This government data, which indicated that both the exports and imports of Asia's largest economy rose in July, "surprised the market at the high end," analysts at Haitong International Research told the news source. However, "it's too early to claim an overall recovery of global and domestic demand."

The data helped to reassure global market participants who were worried about the strength of the recovery in China, which had slowed down recently. As the second-largest economy in the world, this nation's economy has substantial visibility.

After these strong gains, the majority of analysts in the Kitco News survey - 12 out of 18 - predicted that the price of gold will rise next week. In addition, two of the respondents forecast that the metal would decline in value, and another four stated that the commodity will either fluctuate slightly or indicated their neutrality.

Range-bound predictions
Of these last four individuals who predicted that the metal will have slight fluctuations, many predicted that it will move back and forth within a tight range, but will come close to the higher end of that range, and may test the technical resistance there, according to the news source.

Jeffrey Nichols, who serves as the managing director of American Precious Metals Advisors and adviser to Rosland Capital, stated that various factors will contribute to gold staying within a specific range, the media outlet reports. He noted that both chart-motivated selling and physical demand will contribute to the metal staying within these specific prices.

If the precious metal stays within a specific range, such behavior would provide a stark contrast to the sharp changes in value that gold has experienced earlier this year. The commodity fell into a bear market in April, since it declined more than 20 percent from the all-time high that it attained in 2011. In addition to sharp declines, the metal has also had robust gains. However, Nichols stated that for the time being, the metal is trapped within a small range, according to Kitco News.

"So it would seem, gold remains range-bound, though perhaps within a gradually narrowing range," he told the media outlet. "Gold prices are still in a lengthy 'bottoming phase' and may have more work - technically speaking - before breaking through overhead resistance and moving substantially higher."

There are clearly many different market experts weighing in on gold, so education is key when it comes time to use this information. If you want more free trading education, you can find it at TradingPub, home to some of the top investors and traders in the industry.