(Kitco News) - Indecisiveness continues to grip the gold market as retail investors and market professionals remain at odds, trying to guess gold’s reaction ahead of one of the most anticipated central bank decisions in recent years.

Comex gold futures are preparing to end its third consecutive week in negative territory as prices hover around the $1,100-an-ounce area, showing losses of around 2% in what was a relatively quiet, shortened trading week.

Disinterest in the gold market, particularly on the retail side, is another dominate feature in the marketplace as the Kitco News Wall Street vs. Main Street Gold Survey saw another week of relatively low participation, with investors being slightly more bearish.

This week, 195 people voted in the online gold survey. Among the participants, 74 people, or 38%, were bullish on gold next week; 81 voters, or 45%, were bearish on the yellow metal; and 34 people, or 17%, neutral. Last week, 44% of respondents were bullish on gold prices.

Market professionals are slightly at odds with the retail side, with more analysts expecting to see higher prices next week. Out of 35 market experts contacted, 20 responded, of which 9, or 45%, said they expect to see higher prices next week. At the same time, seven professionals, or 35%, said they see lower prices, and four people, or 20%, were neutral on gold. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

The key theme among the bullish analysts were expectations that gold will rally next week, predicting the Federal Reserve holds off on raising interest rates.

“Whatever the Fed decides next week, it will be positive for gold,” said Adrian Day, president of Adrian Day Asset Management. “No rate hike would demonstrate again how timid the Fed is, while an increase would be modest and the market would give a sigh of relief that the long-awaited threat of higher rates is behind us and of no consequence.  This may take a week or two to settle in, however.”

Erica Rannestad, senior analyst at Thomson Reuters GFMS, said that a rate hike has been priced into the gold market for months, adding that she sees potential for some short covering as those expectations get pushed back to December.

On the downside, analysts see the potential for gold to test recent lows as the Fed follows through with its plan.

In the neutral camp, the market professionals are waiting to see what the Fed does they say there is a 50/50 chance of a rate hike on Sept. 17.

“In all honesty, next week’s gold price outlook is anybody’s guess,” said Jeffrey Nichols, managing director at American Precious Metals Advisors and senior economic advisor at Rosland Capital LLC. “It depends mostly on the FOMC. Voting members of the FMOC are themselves at odds on monetary-policy prospects – and some may not yet know their own minds…”

Phil Streible, senior market strategist for RJO Futures, said that with so much uncertainty in the market he recommends investors take strong defensive positions.

Wall Street

Bullish45%

Bearish35%

Neutral20%

VS

Main Street

Bullish38%

Bearish45%

Neutral17%

By Neils Christensen of Kitco News; nchristensen@kitco.com
Follow Neils Christensen @neils_C

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