Spot Gold prices closed in the red on Thursday, as positive jobless claims data from the US reduced appeal of the yellow metal as a safe-haven. Gold did not receive support from concerns over the Egypt front as well as dollar strength capped gains. Holdings in the world’s largest gold backed fund the SPDR Gold Trust continued its downtrend as it fell to 1225.526 tonnes by 10th February, marking their lowest since late January. Mixed market sentiments are restricting sharp gains in gold prices currently. Economic data from the US is helping support view that recovery in the world’s largest economy has picked up pace, which in turn restricts upside in gold. But on the other hand, latest comments by the US Federal Reserve Chairman Ben Bernanke are not very supportive as he said that recovery may not be sustainable as it is backed by stimulus measures, which when exhausted could derail economic growth. This concern should support gains in gold, but dollar strength in the current week made the yellow metal look expensive for holders of other currencies. Outlook We expect gold prices to trade higher, as concerns regarding Egypt persist. On the back of these concerns we expect demand for riskier assets like equities to take a hit especially ahead of the week-end amid geopolitical concerns. Sharp gains in gold however are expected to be capped on account of dollar strength.

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