Gold is on my watch list but still don't like it:

We have seen in the last few years gold lost its glitter and gave a negative return. Currently, Gold has experienced a bit of a revival, jumped 8% in this month (January) which is its best monthly gain in 3 years. International gold can close above the $1280 level after 6 months. Does gold enter bullish territory?

Gold has gained ground this month due to some major global factors such as:

• Swiss central bank's decision to abandon a cap on the value of its currency versus the euro.

• The U.S. economy grew at a slower pace than expected in the fourth quarter.

• Physical demand prospects ahead of the Chinese New Year holidays in February.

• ECB's QE program will spark inflation in Europe that in turn will drive gold prices higher.

Both technically and fundamentally, we don't see much upside in gold. It could be volatile; therefore, gold could easily surpass the psychological barrier of $1,300 an oz to hit $1,325 an oz in the near term. But we can expect gold to be in a range of 27000-29000 level in MCX this year.

The reasons for the bearish outlook are the possible strengthening in the U.S. dollar (A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies), interest rate hikes by the Federal Reserve in the second half of 2015,

Last year, I consistently recommended my outlook on gold for 2015-16 be bearish and the price will remain flat (https://www.youtube.com/watch?v=9y_lrawMEA8). For now, gold is back on the watch list for the moment, but still, it is not time to buy.

Biswajit Behera

Certified Equity Research Analyst

Disclaimer: The views expressed in this article are those of the author. This article is strictly for informational purposes only.