8 February 2016


“BUY GOLD ABOVE 27850 TGT 27950/28100”
Gold:  Gold rose to a three-month high in volatile trade on Friday, as a mixed U.S. jobs report prompted investors to reassess the outlook for U.S. interest rates this year, putting bullion on track for its strongest weekly performance in more than a year. U.S. employment gains slowed more than expected in January as the boost to hiring from unseasonably mild weather faded, but rising wages and an unemployment rate at an eight-year low suggested the labor market recovery remains firm. As a non-interest bearing asset, dollar-denominated gold becomes less attractive if U.S. interest rates rise.
A shaky global economy has lifted buying interest in gold, making it among the best performing assets since the start of 2016 with a gain of nearly 10 percent. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange traded fund, rose to 22.3 million ounces on Thursday, the highest since late October. Other precious metals were unable to turn around from earlier weakness, having fallen from multi-month highs.
Outlook: We expect gold prices to trade positive on the back of weak economic data from the US.

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