Gold Weekly Fundamental Analysis – February 1-5, 2016 -Forecast

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Published: Jan 30, 2016, 13:33 UTC

Weekly Analysis and Recommendations: Gold closed a volatile week at 1117.60 off its highs after the FOMC statement. Gold climbed as high as 1122 during

Gold Weekly Fundamental Analysis – February 1-5, 2016 -Forecast

Weekly Analysis and Recommendations:

Gold closed a volatile week at 1117.60 off its highs after the FOMC statement. Gold climbed as high as 1122 during the week. Gold saw a gain of 1.86% for the week. Gold held steady as equity markets celebrated the decision of the Bank of Japan to send interest rates into negative territory.

Gold is up about 5% since the start of 2016 and the question for investors says UBS is whether it can hold these gains. Joni Teves, analyst at the bank, said gold is “trying to make itself comfortable” at around $1,100 but there is still much work to do for gold to prove itself and get investors involved again.

Holdings in exchange traded funds (ETFs) continue to increase with 1.79mln oz. added to global holdings this month. These inflows are very similar to January 2015’s 1.91ml oz. said Teves.

Futures have seen slower build-up of bullish positions, but Teves argues that a more measured rebuilding of gold positions increases the likelihood that gains are more sustainable and reduces the risk of the market getting ahead of itself.

Gold edged higher on Friday to end the month with a gain of more than 5%. Prices for the metal scored their biggest monthly climb in a year as losses in global stock markets lifted the investment appeal of the precious metal.

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.

Major Economic Events for the week:

	Cur.	Event	Actual	Forecast	Previous
Monday, February 1, 2016
	CNY	Manufacturing PMI (Jan)		49.6	49.7
	CNY	Caixin Manufacturing PMI (Jan)		48.0	48.2
	EUR	German Manufacturing PMI (Jan)		52.1	52.1
	GBP	Manufacturing PMI (Jan)		51.8	51.9
	USD	ISM Manufacturing PMI (Jan)		48.0	48.2
Tuesday, February 2, 2016
	AUD	Interest Rate Decision (Feb)		2.00%	2.00%
	EUR	German Unemployment Change (Jan)		-7K	-14K
	GBP	Construction PMI (Jan)		57.6	57.8
Wednesday, February 3, 2016
	NZD	Employment Change (QoQ) (Q4)			-0.4%
	GBP	Services PMI (Jan)		55.4	55.5
	USD	ADP Nonfarm Employment Change (Jan)		195K	257K
	USD	ISM Non-Manufacturing PMI (Jan)		55.1	55.3
	USD	Crude Oil Inventories			8.383M
Thursday, February 4, 2016
	GBP	Interest Rate Decision (Feb)		0.50%	0.50%
Friday, February 5, 2016
	AUD	Retail Sales (MoM) (Dec)		0.5%	0.4%
	USD	Nonfarm Payrolls (Jan)		190K	292K
	USD	Unemployment Rate (Jan)		5.0%	5.0%
	CAD	Employment Change (Jan)		6.0K	22.8K
	CAD	Ivey PMI (Jan)		50.3	49.9