Gold Monthly Fundamental Forecast – May 2016

Gold had a record month gaining 22.15% this year with most of those gains in the last days of the month after a weak US GDP sealed the door on a rate increase and a surprise by the Bank of Japan. The price of gold soared to 1295.20 with a gain of 5% this month. Gold and silver rallied to their highest since January 2015 as the Bank of Japan’s decision the previous day to hold off expanding monetary stimulus weighed on the dollar, while base metal prices also advanced.

Spot gold rose more than 2 percent. With no major central banks on the calendar this month this is expected to be a lackluster month for precious metals. Gold is expected to hold near the 1250 range.

For the week, the metal is up 3.2 percent in what would be its biggest weekly jump since the week ended Feb. 12. Silver surged 2 percent to $17.867 an ounce, its highest since January 2015.  It was on track for a fourth straight weekly gain. However, gold was prevented from rising further as report released by the U.S. Department of Labor showed personal income better than expected despite weaker than expected spending.

Analysts believed that this is a sign of the U.S. economy still struggling to recover, and another indication that the U.S. Federal Reserve will be cautious and patient in raising interest rates.

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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