Tokachi Group: Gold sold off sharply in the aftermath of the latest US jobs report that showed the US economy created 271,000 jobs in October. The number revived broad-based expectations that the US Federal Reserve will raise the Federal Funds rate for the first time in 9 years at the next meeting of the FOMC December.

The yellow metal, which had staged a meaningful rally since the Fed failed to pull the trigger on rates at its highly anticipated September meeting, fell below $1100.00 before finding support in the $1080.00 – $1092.00 region.

Gold has found little love among investors in 2015 as the rate hike narrative has dominated the financial markets but Tokachi Group says the dynamic will almost certainly change as it becomes clearer that US interest rates can never return to historic norms.

“It’s not obvious to investors yet because they still believe the Fed can engineer a way through this but to us here at Tokachi Group, it’s just a matter of time before the data proves the economy is headed in the wrong direction,” said a Tokachi Group researcher.

“Once the narrative begins to change and people are talking about stimulus rather than speculating on interest rate hikes, we believe gold will resume its upward trend,” he continued.

The firm said it regards gold as a strong buy at current levels and reiterated its standing advice that investors should hold a minimum of 10% of their portfolio in precious metals as a form of investment insurance.