Gold Big Week

- Gold was bumping up against all-time highs on Friday afternoon after prices held above $2,000 per ounce throughout the week. The precious metal also saw its first-ever monthly close above the 2k level, buoyed by positive inflation data and dovish comments from Fed members, supporting the growing belief that the long-awaited big breakout may come soon.

The latest Kitco News Weekly Gold Survey sees retail investors maintaining their optimistic outlook going into next week, while a slight majority of market analysts are also bullish on the yellow metal's near-term prospects.

Adrian Day, President of Adrian Day Asset Management, continues to maintain his neutral stance on gold, and he expects prices to be relatively unchanged next week. "Gold needs to digest the big run up in early October, and specifically from early November," he said.

"Gold is vulnerable here to negative developments in the near term," Day added. "But the odds are turning distinctly in gold's favor for a strong move over the next year and more as central banks reach the end of the tightening cycle even as the economies slip into recession."

Adam Button, head of currency strategy at Forexlive.com, said that rate cuts are coming, and the impact of the U.S. dollar on gold prices has also been extraordinarily strong, so its pullback should support the rally.

"The U.S. rates are at 5.50%," he said. "That's a lot of cutting compared to some other places. So you add that in, and you could get a 15% rally in gold just on U.S. dollar softness in the next two years. That's almost mechanical. And gold is already at record highs in many other places. And then technically, when it gets through that $2,100 range, it's blue skies."

He said this month's seasonal factors are bullish for gold as well. "This is December 1st, it's gold-buying day," he said. "December, January, February, that's the single strongest seasonal trade that I know of in terms of performance and consistency."

Some analysts are saying that gold is overextended and due for a pullback, but Button isn't buying it. "I love to hear that," he said. "Everybody thinks it needs to pull back. Because of that, I think it could just break out. And then you get FOMO… and then you get a real breakout."

Instead, Button believes gold is likely to pick up next week where it left off on Friday, flirting with its all-time highs. "I don't see why it wouldn't," he said. "Listen, data is critical right now. I think gold bulls will cheer for soft ISM, soft payrolls, that would be great. The U.S. dollar, clearly the tide's going out here. This Fed pricing [of rate cuts in March and May] has gone too far, but the Fed didn't push back, so what's going to change it? The blackout starts in 12 hours, there's no pushback coming. So why should that change now?"

This week, 15 Wall Street analysts participated in the Kitco News Gold Survey. Eight experts, or 53%, expected to see higher gold prices next week, while five analysts, or 33%, predicted a drop in price.