15 March 2016


SELL GOLD BELOW 29200 TGT 29000/28500 SL 29450

Gold turned lower and fell below $1,240 an ounce on Monday, as stock markets and the dollar gained, and investors squared positions ahead of closely watched policy meetings of U.S. and Japanese central banks this week The weak move followed Friday's brief bounce to a 13month high after the European Central Bank signaled an end to rate cuts and the euro rose sharply versus the dollar. Gold is highly sensitive to monetary policy and resulting currency moves.The U.S. Federal Reserve's two day policy meeting will start on Tuesday and be watched for clues on the future pace of U.S. rate increases.
Further U.S. rate hikes could lift the opportunity cost of holding non yielding bullion, while boosting the dollar, in which it is priced. The metal has risen 16 percent this year as expectations for further near
term hikes faded.Investors are also keeping a watch on the Bank of Japan meeting this week, when its policy board is set to discuss whether to exempt $90 billion in short term funds from its newly imposed negative interest rate.Hedge funds and money managers increased their bullish COMEX gold position to the highest in 13 months in the week to March 8, the eighth increase in the last nine weeks, data showed on Friday.
We expect gold prices to trade negative ahead of policy meetings of the U.S. and Japanese central banks.

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