Gold Monthly Fundamental Forecast – February 2016

Outlook and Recommendation

Gold ended the month well above its earlier trading levels at 1117.60 but touched a high above 1122 as traders went running for the hills as oil prices collapsed. Gold ended the month with a gain of 5.4%. Gold held steady as equity markets celebrated the decision of the Bank of Japan to send interest rates into negative territory.

For most commodity investors, January was one more bad month in a years-long bear market. Gold was an exception.

Gold futures rallied 5.3 percent in January, the best gain in a year. The returns were far better in mining stocks, with an index of South African producers jumping 35 percent for the month, the most since at least 1995.

Turmoil in Chinese financial markets, plunging oil prices and signs of softening U.S. growth left investors reeling in January, boosting demand for traditional safe-haven assets like gold. Rising bets that the Federal Reserve will hold off on further interest-rate increases added to the appeal of bullion. While losses deepened in other metals, gold outperformed and holdings in exchange-traded funds backed by the metal rose to the highest since November.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

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