Gold commentary from Bank of America Merrill Lynch
: gold has rallied into the new year. We have been bearish gold since 2013 on a confluence of factors, including a stronger USD, falling oil prices, subdued market volatility and a bottoming out of real interest rates. Moving into 2016, we thought many of these trends, including tighter US monetary policy may continue to provide headwinds to the yellow metal. Yet, concerns over the health of China’s economy and activity in the US have pushed prices higher. We see a risk that gold may give back some of these gains, if the immediate volatility subsides. Having said that, we remain steadfast in our expectation that this will be a transitional year, with gold ultimately breaking out of the bear market.
