The gold prices are oversold as Wall Street, Main Street see upside potential next week

(Kitco News) - The gold market has run too low too fast, bringing bullish Wall Street analysts back into the marketplace according to the latest results from the Kitco News Weekly Gold Survey.

Meanwhile, Main Street investors remain significantly bullish on gold in the near-term as it appears economic uncertainty and the prospect of lower global interest rates provide a bid for the yellow metal.

“The market doesn’t look great right now but I got to stay bullish because there is still so much news still to come out,” said Kevin Grady, president of Phoenix Futures and Options. “Central banks are still going to cut rates and that is good for gold.”

This week, 15 market professionals took part in the Wall Street survey. A total of 9 voters or 60% called for gold to be higher. Bearish and neutral votes were caught in a tie with; three votes or 20% called for either lower to neutral prices next week.

Meanwhile, 1,164 respondents took part in an online Main Street poll. A total of 679 voters, or 58%, called for gold to rise. Another 287, or 25%, predicted gold would fall. The remaining 198 voters, or 17%, saw a sideways market.

Kitco Gold Survey

Wall Street

Bullish60%

Bearish20%

Neutral20%

VS

Main Street

Bullish58%

Bearish25%

Neutral17%

In the last survey, Main Street expected to see higher prices while Wall Street bulls and bears were caught in a statistical tie for the week now winding down. As 12:21 p.m. EDT, Comex December gold futures were trading at $1,530.00 an ounce relatively unchanged from the previous week.

Wall Street and Main Street both have an 18-15 winning record for the year to date, meaning respondents have been right 55% of the time.

The gold market was facing its second negative weekly close but has managed to bounce back Friday into neutral territory after economic data showed that the U.S. economy created fewer jobs than expected in August.

Although there is some caution among Wall Street analysts, sentiment remains positive as the market has held critical support above $1,500 an ounce.

Adam Button, managing director at Forexlive.com said that the drop in gold was an important test for the market but he added that he expects dips will be bought.

“The slump this week was overdone. Retail and fund manager enthusiasm continues to grow for gold,” he said.

Richard Baker, editor of the Eureka Miner Report note that even after gold’s drop mid-week, Friday’s recovery shows that safe-haven demand is still alive and well because of geopolitical and global trade issues.

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