Gold has experienced a minor rally from its low of $1,250 per ounce on October 14. Currently, the spot price rests at around $1270 per ounce. Most of this movement has been the result of dollar weakness over the last week. Overall, the metal has been in a bearish trend, but this looks like it is soon the change as geopolitical concerns calm.
Most of the price movements in gold have been opposite reflections of the behavior of the U.S dollar; demand for the metal remains intact.
Fundamental Outlook is Strong.
Regardless of Forex concerns, the fundamental outlook for gold is as strong as ever. Much of the demand for the remainder of 2016 will be coming from China and India. With gold so affordable, and a healthy monsoon season ensuring a strong harvest, Indian consumers are expected to increase gold consumption as much as 60% YoY, according to the Indian Bullion Association.
Households in India maintain the largest private holdings of the gold in the world, and as India moves into the gold buying holidays of Diwali and the Indian Wedding season, strong demand is a bullish factor for the price of the metal for the rest of 2016.
