Short Gold/USD (from 11-Dec to 13-Dec)

Stopped out of this trade on USD following the FOMC meeting on 13-Dec.

Real-Time AmpGFX – sold gold/USD (Mon 11/12/2017 2:20 PM MT)

I have sold half unit of gold/USD at 1242.42



Gold has been falling more significantly than can be explained by movements in the USD.

A stronger equity market might explain a lower gold price, but there has been a lot of rotation in equity sectors, and emerging market equities have underperformed in recent weeks.

It seems like there is enough uncertainty around geopolitics, including Chinese efforts to control shadow banking, USA announcements on Jerusalem, and US politics, that gold should be out-performing, not under-performing.

I wrote on Thursday that there may be rotation from gold to bitcoin.  I received some skeptical responses on that  (someone commented on linked-in that they were awarding me the “worst piece of analysis award for 2017”, but I think there could be something in it, and this theme could gain traction.

Bitcoin is attracting a lot of interest that may be highly speculative and has many skeptics.  My view is that is can develop into a trusted store of value, and whether you want to classify it as a bubble or not, its rise, if it continues, may see it place downward pressure on gold.

I also see upside risk for the USD as US rates continue to creep up and the tax bill is likely to pass.  Position-squaring and higher dollar funding costs over the year-end turn may also support the USD.



Long a half unit of an XBT derivative at $10,600 (Bitcoin tracker ETN) – no orders

Short one unit AUD/USD at 0.7506; s/l  0.7578; t/p 0.7178

Short half unit Gold/USD at 1242.42; s/l 1253.78; t/p 1200.05

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Greg Gibbs,
Founder, Analyst and PM
Amplifying Global FX Capital Pty Ltd