Forum
Posts by "speculator"
804 Posts Total by "speculator":
782
Posts by Anonymous "speculator":
But dollar has weakend on interest rate differential expectations which may result in the market revising the FEDs rise in interest rates to be earlier than initial expected. This would cause investors to move away from gold especially as it offerers ZERO interest and is highly volatile as we saw friday. Also it may cause a carry trade unwind away from the dollar and very possibly back in to the yen.
The whole world wants a strong dollar including china. BNP paribas believed dollar will rise for 2 years in rapid FED hikes and liquidity withdrawal. USD target of 80 by dec end.
Asad, your oil shorting will bite you hard as fundamentals are starting to look much better for oil for 2010 anyway. Economic recovery means higher oil demand and prices as you know.
It is however too soon to make any firm prediction but I do think gold is overpriced and will not higher than 1250 this year for sure.
We can easily get a rising dollar with flat to small gains on stocks.
Price of an asset will never fall to zero and there is always cycles. the dollar will rise on monetary tightening. The watch all the asset markets and the fact that stocks have risen SO much they would have reached most of their objectives of reflating.
The world does NOT want a strong dollar its the last thing they want. The dollar will rally faster than it fell since march and many WILL be bitten. The smarterst of investors are not betting against dollar collapsing and quite the opposite.
Im sure many have been burnt buy shorting the dollar against the yen this week. As for gold, people will get burnt thinking it will go much higher. It seems that the dollar is funding gold which will not last long.
1 - central banks will not be net buyers of gold for good. We are in a phase where because they have not held much gold they are stocking up on the metal. This will not last forever
2 - the dollar is in a multi-year bull
3 - fed will raise rates/remove liquidity far earlier than most expect
4 - dollar remains heavility short
5 - bearishness on the dollar is an extreme levels
6 - China is likley to burst next year and so may UK
7 - dollar liquidity has fed into risky assets which is likely to put some pressure on stocks in the first half of 2010 with a decent run thereafter.
8 - equities on the whole are not going to experience a great run as this did in the last few quarters but will still be up yoy end of next year based on improved fundamentals not lack of interest rate.
bnp paribas have also sent a note regarding 2 years of dollar rally to come. have a look at bloomberg.
Dont put a lid on the dollars potential rise. A few years means 2+
Gold can still rise if dollar rises. If there is a crisis a HUGE covering of dollar shorts and flows back into dollars will occur. Todays decline in stocks confirms that investors are still very skeptical about risk and are taking caution. The markets remain very volatile which is normally a sign of uncertainty with investors. The dollar index could jump to 80 by year end if there is caution amongst investors.
UK may also face near default in the future.
I see gold climbing higher based on demand mainly. once the central banks have accumulated enough gold in the very near future, the price should collpase over the next few years. Gold is not a buy a hold but more of a ride the rally whilst there is pent up demand. I would never short gold at this stage even if i think the dollar wont plummet as main driver is not dollar weakness.
i strongly doubt we will hit even 1.53 this year. i remain bullish on the dollar for this year at least. major support at USD index 75 is forming for some weeks now. The market is well short of dollars and cautious remains after shuch a great rally in equities. Theres just too many dollar bears and not much room for many more. I do not expect there to be any major correction in US/UK equties next year but minors will happen of up to 10% on each leg.
fed will also surprise markets by removing liquidity which will massively support dollar early next year. The dollar will also not rally fast but slow keeping equities in an upwardly trend in to next year.
Gold on the other hand will rise into year end and i see 1250 at 95%