Gold staged a strong rally following the conclusion of the FOMC meeting last week with the market downgrading interest rate expectations and also the outlook for inflation. Gold ended the week up over US$23/oz and erased all of the losses of 2015 so far.

The US dollar weakness and dollar profit taking is benefiting gold, in the short term I expect this will continue and be a significant driver for the price of gold. The dollar index lost more than 2.5 percent last week.

This week traders will be looking to see if gold can consolidate further and hold the US$1,191/oz level , if it does, this would be confirmation gold has reversed its declining channel which began in 2013.

The most important piece of data out this week is the Consumer Price Index (CPI) out on Tuesday. It is expected that it will be positive for the first time in five months, but only marginally positive. Low inflation rates are an issue for the Fed with it trying to lift inflation to the 2% range. A weak CPI reading will cause further UD dollar weakness and increase the demand for gold. Other data and events out this week include, Greek Prime Minister Alexis Tsipras is expected to provide a list of reforms to the Eurogroup this week, he will also meet German Chancellor Angela Merkel in Berlin. On Wednesday we have US New Home Sales data and Durable Goods Orders out, Thursday US Jobless claims and US Q4 GDP data out Friday.

Silver also is on a good run at the moment, ending the week on a 4 week high. Traders will be looking for silver to continue to push higher and consolidate above US$17.00oz. Silver finished the week at US$16.73oz.

Gold closed at US$1,182.40oz in New York on Friday, up an impressive US$23.40oz on the week.

Courtesy of: www.BullionIndex.com.au

Harley Salt is co-founder of www.BullionIndex.com.au a physical gold, silver and platinum trading and investing company located in Melbourne, Australia.
Bullion Index offers direct market access to 15 global physical bullion exchanges and storage facilities in key locations including London, Zurich, New York, Hong Kong, Singapore, Dubai and Sydney. Their clients from across the globe can trade bullion bars and investment grade coins simply and securely via the MetalDesk online trading platform.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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