D. Schnider, head of commodities and Asian FOREX in Hong Kong for UBS was talking greasy about gold last night, saying the yellow metal was set to ‘rollover’, due to two Fed hikes to come that aren’t priced into markets.
No word on how two surprise Fed hikes would correlate to stocks soiling themselves. However, Dom did say King Dollars would make a resurgence, which might portend to some deleterious stock price action.
If you enjoy the content at iBankCoin, please follow us on Twitter“Definitely, second half of the year, we’re going to get two hikes — that’s not fully priced in, and that’s why most dollar strength’s to come,” Dominic Schnider, head of commodities and Asia-Pacific foreign exchange at the unit in Hong Kong, said in an interview on Bloomberg TV. Gold, which traded at $1,229.79 on Thursday, was last below $1,150 in February.
Gold’s been in retreat this month, paring a gain since January, as U.S. central bank policy makers have stepped up a drumbeat of commentary that the first rate rise of 2016 may come either as soon as next month or possibly in July, buoying the dollar. UBS’s Global Asset Management Head of Asia Pacific Rene Buehlmann said last month that as bullion offers no yield, it doesn’t add value to investors’ portfolios in the long run. Schnider also highlighted poor physical demand for bullion in the interview.
“Some people are going to get caught on the wrong side,” Schnider told Bloomberg’s Angie Lau. “Gold is going to roll over, we’re going to fall back to $1,150, and so be ready for more weakness in the short term.”
This weeks raaly looks like a setup for yellen rate hike talk tomarrow, which may lead to dollar rally and everything else down. Will see. Good call on this weeks rally fly. The price move was twice what I was expecting. Thats the circus for ya. Lets see where we are at the close tomarrow.