Wall Street cautious on gold, Main Street bullish with prices stuck in neutral at $4000

NEW YORK (November 11) After two weeks of sharply lower prices, the gold market has managed to ease some of the selling pressure. However, a neutral close on Friday still leaves it directionless, as most Wall Street analysts remain lukewarm on the precious metal; meanwhile, Main Street investors are still solidly bullish.

“Bulls have built a good price floor under the market recently. However, they need a fresh, fundamentally bullish spark to ignite a solid upside move—which is not occurring presently,” said Jim Wyckoff, Senior Technical Analyst at Kitco.com.

The $4,000 level remains a critical psychological threshold for the gold market, as it looks to close around that area for the second week in a row. Spot gold ended the week at $4,001.76 an ounce, down less than a dollar from last week’s closing price.

Although gold is stuck in neutral in the near term, many analysts have said that its upside potential remains firmly intact.

“I view the current gold consolidation around $4,000 per ounce as a classic pause in a structurally bullish trend,” said Aaron Hill, Chief Market Analyst at FP Markets. “It's been range-bound between roughly $3,950 and $4,060 for the past week. This follows a remarkable year-to-date surge of over 48%, driven by safe-haven flows amid geopolitical tensions and central bank buying. The key question—whether risks tilt to the upside or downside—leans bullish in my assessment, with a base case targeting $4,200 by year-end. However, a decisive break below $3,950 could signal near-term downside to $3,900 or lower.”

Darin Newsom, Senior Market Analyst at Barchart.com, said that amid so much uncertainty and geopolitical volatility, gold’s price action has become a coin flip. Despite the noise, however, he remains bullish on the yellow metal.

“Should gold go back up? Sure. Does that mean it will? Absolutely not. We have no idea what the U.S. president will say, do, or post next. Like most other markets—though perhaps not as much as some—the gold market is subject to the whims of one person with one social media account. I don’t think this was the way markets were intended to work, but it’s the situation we are dealing with,” he said.

Unfortunately for many investors, the lack of key U.S. economic data has removed potentially important catalysts from the marketplace. The ongoing U.S. government shutdown, which has reached 38 days, is now the longest in history. Rich Checkan, President and COO of Asset Strategies International, said that he is looking past any near-term weakness in gold while the U.S. government remains closed.

“Although we may see a further dip before we move to new highs, I believe the dysfunction known as the U.S. Congress and the government shutdown—now the longest ever—will buoy gold prices this coming week,” he said.

With little economic data to provide fundamental support for gold, some analysts said they are relying on technical price action to determine the next major move.

Lukman Otunuga, Senior Market Analyst at FXTM, said that he is sitting on the fence until he sees a solid break of resistance or support.

“Looking at the charts, a solid breakout above $4,030 could signal further upside, with the 21-day SMA at $4,080 and $4,130 acting as key levels of interest. Sustained weakness below the psychological $4,000 level may drag prices toward $3,960 and $3,925,” Otunuga said.

Fawad Razaqzada, Market Analyst at Forex.com, said that he has no strong views on gold as the market remains caught in a tug of war.

“The $3,930 level is where gold found support earlier this week, so a break below it would now be quite significant from a technical standpoint. On the upside, $4,045 is where gold needs to climb above to trigger technical buying. This was the high from last Friday,” he said. “Granted, the fresh weakening of the U.S. dollar amid signs of softness in the labor market, as reported by Challenger yesterday, and the drop in consumer confidence, as reported by the UoM today, both point to potential gains for gold. However, the metal has been trending in the same direction as equity markets. Therein lies the problem: with stocks struggling, gold has been unable to find any fresh haven demand to lift it above $4,000.”

This week, 21 Wall Street analysts participated in the Kitco News Gold Survey. Among the participants, 13 analysts, or 59%, were neutral on gold in the near term. At the same time, seven analysts, or 32%, were bullish for next week, while two analysts, or 9%, saw prices moving lower.

Meanwhile, 221 votes were cast in the online social media poll. Of these, 123 respondents, or 55.7%, expected gold to rise next week. Another 39 respondents, or 17.6%, anticipated lower prices, while 59 voters, or 26.7%, were neutral in the near term.

Adrian Day, President of Adrian Day Asset Management, said that although gold should have more time to consolidate, he remains bullish in the near term.

“The drivers of gold for the past three years remain intact, while the potential for new uncertainty exists if the U.S. Supreme Court overturns Trump's tariffs,” he said. “The recent pullback, in truth, has not been sufficient—but events may overtake markets.”

Alex Kuptsikevich, Chief Market Analyst at FxPro, was one of two bearish analysts on gold. He said that investors can’t ignore the damage two weeks of selling have done to the market.

“The upward trend has already broken down,” he said. “Gold has stabilized around the $4,000 mark over the last ten days, ending the week at roughly the same level it started. Attempts by sellers to push the price below $3,900 are meeting with impressive buying interest. This is facilitated by the Supreme Court, which is considering the legality of U.S. tariffs. If Donald Trump is defeated, the money will have to be returned. As a result, the budget deficit and public debt will increase, leading to chaos in the financial markets. Concerns about this are prompting investors to seek refuge in safe-haven assets. However, this all appears to be an attempt to play the old card, which can only delay the inevitable. HSBC, Bank of America, and Société Générale continue to maintain their forecasts of $5,000 per ounce. However, the gold rally has broken down, and selling on the rise is becoming relevant.”

KitcoNews