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Market players turn decidedly bullish on near-term gold outlook

Solid gold in the shape of Japan's Mount Fuji


After a few weeks of split views, survey participants in the weekly Kitco News Gold Survey have turned decidedly bullish in their views of gold prices for next week.

In the Kitco News Gold Survey, out of 33 participants, 26 responded this week. Of those 26 participants, 21 see prices up, while two see prices down, and three are neutral or see prices moving sideways. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Gold's move back over $1,700 (U.S.) following the re-election of U.S. President Barack Obama has many survey participants seeing higher gold prices. They also cited another support for gold: the likelihood that Mr. Obama will not replace Federal Reserve chairman Ben Bernanke before his term expires in 2014.

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"In the name of the printing press, I say bullish! Bullish!! BULLISH!!! The price of gold can be viewed like the temperature of a human body, the higher the temperature the more ill the body, the higher the price of gold the more ill the fiscal system," said Sterling Smith, futures specialist at the commodity research division of Citibank Institutional Client Group.

Several said gold's bounce off support around the $1,670 area could also mean further gains for the metal.

But not everyone sees it that way. Those who see weaker prices said the rebound from last week's lows happened too quickly. "The current rally has gone too fast without building a higher base to work from. I look for $1,752 to be a resistance point and $1,715 to be a support zone," said Ira Epstein, director of the Ira Epstein division of The Linn Group.

Those who are neutral on market direction said there's little impetus to push gold out of its current range of $1,700 to $1,750.

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