According to Nihon International, Gold prices continue to hold their own despite positive news on the US economy and a broad-based rally in global equities. The precious metal has been among 2016’s best performing assets, rallying 16% since the start of the year.

Its appeal as a safe-haven has been restored as equities have exhibited acute volatility in the first two months of the year and as investors begin to lose faith in the ability of the US Federal Reserve to follow through with planned interest rate hikes in the face of a global economic slowdown.

“Gold prices are facing pretty tough technical resistance in the $1250 to $1260 range but there appears to be a very solid base of support above the $1200 level,” said Esan Souhani, a commodity trader at Nihon International.

Gold slipped after fresh economic data showed that US manufacturing stabilized slightly in February, reigniting speculation over the timing of additional US rate hikes and lifting the US dollar. Gold rebounded later, however, as some investors remained concerned that the root causes of the volatility at the start of the year have yet to be addressed.

“We’ve noticed a surge in appetite for gold in China over recent months which we attribute to investor concerns over the falling value of the renminbi. The People’s Bank of China has moved to devalue the currency twice in the last 6 months and, consequently, many investors holding renminbi are gravitating towards alternative assets and currencies including gold in the hope of preserving value,” explained Souhani.
About Nihon International:
Nihon International is a top-tier independent wealth management and investment house that delivers high caliber financial services to both private clients and institutions.

To individuals, families and charitable foundations with in excess of US$250,000 in investable assets, we provide discretionary investment management, capital advisory investment management and full execution-only services.

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