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Recent Performance

Factors moving metal prices

In 2015 gold consolidated at around the cost of production. Weakness in the market found bargain hunters entering new positions and strength was unable to be sustained. Last year the Federal Reserve finally raised their base interest rate, although this policy changed at the last meeting of the year and has been caveated with dovish tones from Fed Chair Yellen.

 

Following gold's correction from the highs of $1,921 in 2011 the market consolidated and traded without clear direction last year. The dynamics of the physical demand in Asia shifted from its previous norm. As India continues with their increased import duty on gold which stunted demand, China actively encouraged physical gold investment and continues to be ahead of India as the world's largest consumer. In 2015 central banks added more gold to their foreign exchange reserves.

 

This year looks to be another fascinating one for global financial markets. On one side of the Atlantic the U.S. have hinted that they will raise their interest rates again at some point, whereas in Europe the ECB have already started rolling out their latest stimulus package to try to encourage economic growth. It will be interesting to see whether this stimulus package is enough to boost the weak economies, whether there are any more flare-ups in Greece, the result of the UK’s referendum on EU membership and the timing and rhetoric surrounding any rate rise in the U.S.