The Week In Hindsight, 07 February 2014
Gold’s recovery back to test the $1270 mark once again seems a clear indication that January’s emerging market sell-off may have reignited the fires of global caution over the past week, leading investors to top up on catastrophe insurance. Spot prices for the precious metal were further boosted on Friday by feelings of uncertainty over a slowdown in US payrolls growth.
Despite the robust recovery in gold our overall outlook for the metal going forward remains unchanged. This is as we continue to believe that the economic recovery in the western world will remain on track throughout the year which is likely to see demand for gold at the current prices suppressed. It is likely that prices will see some upside at times, particularly on occasions when emerging market concerns are increased, however, these gains are likely to remain capped at the $1300 per ounce level.