(from our Tactical report of 10th January 2017)

The major sell-off in gold in 4Q16 offers a great tactical entry to buy gold.  Gold has seen significant outflows over the past 3 months:

Also January is a seasonally strong month for gold:

The macro picture also remains supportive of gold, with rising inflation expectations, still supportive global excess liquidity conditions and a great deal of political uncertainty surrounding Trump.  On a mean-reversion basis, goldminers also have positive expected returns over the next 6 months.

All charts – Source: Bloomberg and Variant Perception