Uncertainties Surround Optimism Over Gold Valuation Recovery In 2016

KUALA LUMPUR, Jan 14 (Bernama) -- Uncertainties still surround the optimism over gold valuation recovery in 2016 after a third consecutive year of losses and despite the sequence of increased geo-political concerns globally. ForexTime (FXTM) Chief Market Analyst Jameel Ahmed said despite the different geo-political tensions that have been ongoing for some time now, there has been no significant bounces in the valuation of the safe-haven metal to date. "Many were left stunned that despite the high uncertainties seen in the financial markets last year, including increased geo-political tensions, intense concerns over the China economic downturn and the extreme uncertainty in Greece, gold suffered from very low buying interest. "It was only the shock from the Swiss National Bank in early 2015 that increased safe-haven appetite," he said in a statement. He said the recent bounce in early January following the global equity sell-off saw some potential for an improvement in safe-haven appeal. However, the Federal Reserve (FED) still holds the key to gold trading, whereby public confidence that it intends to raise interest rates on around another four occasions this year, would limit the extent of gold recovery. Jameel said as expectations increased that the Fed will move once more in the coming months, gold for now, will still face pressure. He added on a technical front, the area above US$1,110 is seen as major resistance and until the precious metal closes above this level, investor focus would still be geared towards selling the rallies rather than buying the dips. -- BERNAMA