Gold Winded by Strong US Data

February in review

• Gold shed 5.2% over the month, as surprisingly strong US economic data propelled both yields and the US dollar higher
• Global gold ETFs suffered more losses led by European funds, while North American funds saw small outflows for the first time in two months. Recent futures positioning remains unavailable following issues with the data.

Looking forward

• Strong data in February reversed the four-month trends of most assets including gold
• While a bout of economic strength can’t be dismissed, arguments that it was an exception and the US economy is on course for a more material slowdown are convincing
• This should reinforce a solid case for gold for the remainder of 2023, as laid out in our Outlook.