Gold Fundamental Analysis – Forecast for the week of August 15, 2016

Gold concluded a quiet week at 1341.80 well off its highs just over 1350 this week. Gold remains a buy in the coming week as traders will most likely push it towards its top range after Friday’s decline. Platinum which was the outperformer of the market this week ended with a loss of 1.92% trading at 1128.55. The next big market maker will be Janet Yellen on August 26^th.

Boosted by weaker U.S. equities, dollar and disappointing economic data from China and the United States, the precious metal, widely seen as a safe haven asset, had rose during much of the session.

Investors started to get wary as prices failed to hold ground above the key level of 1,350 dollars. The U.S. Dow Jones Industrial Average fell by 70 points, or 0.38 percent, which analysts noted was favorable to gold.

The U.S. Dollar Index, a measure of the dollar against a basket of major currencies, also fell 0.26 percent to 95.66. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions.

Investors also took note of worse-than-expected the producer price index which showed that the index fell 0.4 percent in July.

Investment demand for gold hit record first-half levels this year, a World Gold Council report showed on Thursday, fueled by a push towards low and negative interest rates, and concerns over political issues such as Brexit.

Strength in investment offset a drop in jewelry purchases, especially among leading consumers China and India, to take overall first-half gold demand to the second highest on record, at 2,335 tonnes.

Investment in gold surged to 448 tonnes in the second quarter, more than double the figure for the same period of 2015, driven chiefly by a year-on-year rise in ETF investment to 236.8 tonnes, against outflows of 23 tonnes a year before.

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