• Gold experienced a breakout last week after traders digested a lew of mixed US economic data such as initial jobless claims, new home sales and consumer sentiment index. Coupled with a less hawkish Fed’s statement, which pointed towards a slimmer chance of a March interest rates hike, the US dollar settled on a weaker tone last week.

• The ongoing political uncertainty in Europe has boosted the demand for the safe-haven asset. Also, investors may take cues from an address by U.S. President Donald Trump to Congress this Tuesday for further clarity on his economic policy, which may dictate the direction of gold and US dollar, eventually.

• Gold futures have surged above the US$1,241 level, marking the fourth consecutive week of gains. Technical reading suggests that the recent breakout may spur further buying interest towards the US$1,294 and US$1,338 levels over the short to medium term. The weekly MACD indicator is trending towards zero, while RSI is above 50. Support will be located around US$1,218, followed by US$1,196.

• On the metal commodities segment, gold was the leader of the pack leading initial rally among other metals such as silver, copper, and aluminum.

Source: Hong Leong Investment Bank Research - 27 Feb 2017