Unanimity On Gold Not Falling Next Week

In a Bloomberg straw poll, conducted yesterday, 18 out of 20 traders, investors and analysts said that gold will rise next week. No a single one of the twenty said that gold would fall.

The metal gained this year amid speculation that debt- cutting measures by European nations will slow growth. World Bank President Robert Zoellick this week said there are “challenges” ahead in Europe even if rescue packages put together by the authorities have “bought time.” Spain’s central bank said June 16 it planned to publish the results of stress tests on the nation’s lenders to counter speculation the country needs international aid.

“Gold is sending the signal that paper money, and the people that control paper money, can’t be trusted,” said Adrian Day, chief executive officer of Adrian Day Asset Management in Annapolis, Maryland. “Gold’s action the past several weeks has been remarkably strong, recovering from declines quickly. All the reasons that caused global investors to buy gold over the past six months remain.”

Naturally, unanimity is going to make a contrarian skittish. So would a 90% consensus for an outright rise. Ironically, gold has already made a new record today - making the consensus forecast more difficult to achieve.