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Hansen: Gold holds its mettle but be cautious

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Gold has started the year trading at almost the same level it was this time 12 months ago. Over the same period, the Dollar has risen almost 15%. That should have had a negative impact on precious metals but it hasn't affected gold. 

Saxo's Ole Hansen notes there are other issues that are also adding support to gold. Firstly the Greek political crisis which may continue to hurt the Euro even after the January election. Secondly the weak economic data coming out of China could bring forward some stimulus activity which could also lend support to gold. And thirdly as stocks fall off the back of tumbling energy prices, gold is benefiting.

But Hansen offers caution for the start of 2015 because "the drivers are still stacking up to the negative side". He thinks the upside is limited to 1240/oz. He is though more bullish in the medium-term. He also says traders should keep an eye on Euro Gold - XAUEUR is at its highest since September 2013.