One of the best performing assets this year, gold prices rallied an impressive 22% on a yearly basis since January of 2016. Risk aversion combined with uncertain monetary policy saw gold prices, which were trading below $1100 only in December gaining over $200 an ounce in a matter of four months.
Economic data continues to remain weak in the US, with last week showing the first quarter’s GDP coming out at 0.50%, marking a slowest pace of increase in over two years. The Federal Reserve last hiked interest rates in December of 2015 and has stood on the sidelines since then, citing weak global growth and heightened risks. In the near term, there is doubt the gold rally can be sustained. This week the US nonfarm payrolls report will be due for release with expectations calling for a 200,000 jobs for April while the US unemployment rate is likely to stay put at 5.00% - both to affect gold upon release.
Gold Breaches $1300
Market Trends - 02/05/2016