Wall Street Has Abandoned Gold — But Main Street Is Still Buying the Dip

The short answer: In Kitco's latest weekly gold survey, 10 of 16 Wall Street analysts — 63% — expect gold to fall further this week, and only one expects a gain. Retail investors disagree: 53% of 184 Main Street voters still expect gold to rise. The split follows spot gold's fall to about $3,875 an ounce on Friday, October 30, its weakest level in more than a year.

What happened to gold last week?

Spot gold started the week at $3,994.95 an ounce and briefly recovered, reaching a weekly high of $4,082.50 on Wednesday as Treasury yields eased and the dollar softened. The recovery did not last. After the Federal Reserve held rates at 3.75% to 4.00% in a 10-2 vote — with two policymakers dissenting in favour of another 25-basis-point hike — stronger U.S. growth and inflation data pushed sellers back in. On Friday, a sharp technology-led selloff in equities triggered wider liquidation, and gold broke decisively below $4,000 and then below $3,900, setting a weekly low of $3,870.25. Kitco put the weekly fall at 3.74%, with the last price at $3,875.05.

What does the Kitco survey show?

Of the 16 analysts in the Kitco News Weekly Gold Survey, 1 (6%) expected gold to gain this week, 10 (63%) expected it to decline, and 5 (31%) expected sideways trading. Main Street was almost the mirror image: of 184 online votes, 98 investors (53%) expected a rise, 56 (30%) expected a further fall, and 30 (16%) expected consolidation. That is a clean split after a steep selloff.

Why is Wall Street bearish?

The bearish case is mostly about levels and interest rates. Marc Chandler of Bannockburn Global Forex told Kitco that "gold's shine has dulled," noting the metal was near $4,700 as recently as late August — roughly 18% above Friday's close — and that a push to new lows for the year could take it into the $3,750 to $3,850 range. Colin Cieszynski of SIA Wealth Management said he was bearish for the coming week, calling the breakdown below $4,000 significant. Daniel Pavilonis of StoneX warned that, with near-term support broken, gold may need a sign of easier monetary policy to resume its longer uptrend, and Jesse Colombo said the $3,900 to $4,000 zone he had been watching as support has now been tested, with around $3,500 the next level he is watching if it fails decisively.

Rates are the other half of the story. Gold pays no interest, so expectations of another Fed hike raise the cost of holding it. A hawkish Fed hold, firm GDP data and elevated core inflation all pointed the same way last week, and analysts quoted by Kitco also linked Friday's fall to forced selling as technology stocks dropped — a reminder that even a traditional haven can be sold when investors need cash.

Why is Main Street still bullish?

Retail voters have kept a bullish majority through the selloff, treating the drop as a buying opportunity rather than a trend change. They were not entirely alone among professionals: Rich Checkan of Asset Strategies International expected an unchanged week, citing competing forces — including geopolitical risk around the Strait of Hormuz and the U.S. midterms — and said he would treat drops in gold as an opportunity to buy. The two sides are reading the same break below $4,000 in opposite ways.

What happens next?

This week is unusually crowded, and the data could settle the argument. Monday brings the ISM manufacturing report, Tuesday brings JOLTS job openings alongside the U.S. midterm elections, Wednesday brings ADP payrolls and ISM services, Thursday brings the Bank of England's policy decision and weekly jobless claims, and Friday brings October nonfarm payrolls and preliminary University of Michigan consumer sentiment. Weak jobs data could cool hike expectations and help gold; strong data could reinforce the bearish Wall Street view.

This article reports what happened and how markets reacted. It is not financial advice, and it does not recommend buying, selling or holding gold or any other asset.

Sources

Kitco News — Wall Street abandons ship after gold sinks below $3,900/oz
FinanceFeeds — Gold price today: $3,875, 63% of Wall Street says lower
HawkValue — Gold fell 3.7% in a week; analysts lean bearish, retail bullish

FAQ

What is the gold price now?

Spot gold last traded at about $3,875.05 an ounce in Kitco's Friday, October 30 report, after a weekly low of $3,870.25 — its weakest level in more than a year. Markets reopen on Sunday evening.

What did the Kitco gold survey find?

Of 16 Wall Street analysts, 63% expected gold to fall this week, 6% expected a gain and 31% expected sideways trading. Of 184 Main Street voters, 53% expected a rise, 30% a fall and 16% consolidation.

Why did gold fall below $4,000?

Kitco linked the fall to a hawkish Fed hold, stronger U.S. data that raised hike expectations, and Friday's technology-led equity selloff, which triggered wider liquidation across precious metals.

What could move gold this week?

Analysts point to ISM data, JOLTS, the U.S. midterms on Tuesday, the Bank of England decision on Thursday, and Friday's October payrolls report, which could shift expectations for Fed policy.