Can Gold Ride the Fed, Iraq to a Sustained Rally?

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June 23 (Bloomberg) -- Bloomberg's Julie Hyman, Greg Bender and Bob Iaccino, chief market strategist at Tethy’s Partners, put gold futures in focus. They speak in "On The Markets" on "In The Loop."

It is really interesting after the big down year it had last year.

Bob, what do you think we are seeing here in terms of where we will see gold go from here?

Some of the impetus comes from what we are seeing in iraq.

Will the the continued -- will it continue to be a reasonable buy?

I think so.

You are looking at the first back-to-back positive quarters for gold.

I think the fundamentals for gold in the medium-term or not that great.

We are on the other side of fed easing.

In the euro zone, we are getting stages of aggressive easing.

Other than the dollar, the other currencies are going to be weaker and you will continue to see global demand just a stone that -- just based on that.

Greg, you are not seeing -- i mean, you are seeing the underlying reasons for gold to be week that are still there.

Not enough counterbalance?

You definitely cannot ignore the huge volume search we saw on thursday on the back of the greater than expected cpi number.

The etf trading 24 million shares.

On the backside of that, you have flows into that etf and open interest on the futures contract still a multiyear lows.

Until you get real money coming in from the sidelines, i think most traders will be looking to save this move higher.

Bob is not one of them.

Can you tell us what exactly -- what trade you will be putting on gold right now?

I am long gold as of early this morning and i will stay long gold until we get to the 1300 level.

I think of we test 1300, it will be a bit of a run down.

You get almost a 3-1 reward risk.

I think a lot of people, in the past couple weeks, have been incorrect how dovish the fed is going to be.

I think short to medium term, you will see gold fairly easily.

You would put a stoploss on the gold trade.


A larger fundamental from the gold, we are going to see a move past that 1200 level.

Short to medium-term term, we are talking about a trade here.

Got you.

Let's put bob's trade in layman's terms.

If you look at gold, it is training around $13-$14 an ounce.

Gold trades in contracts of 100 ounces.

He would make a total profit of $2600 per contract in this theoretical situation.

The contract rolls over.

What does that mean?

All futures contracts expire.

The most active contract expires in august.

A couple of weeks in july, traders are going to be looking to liquidate their august contract that is going to expire and roll it over into the next act of futures contract, which would be december.

They liquidate one and use the money from that to buy the next contract out.


There is also another component.

There is a spread between those could -- two contracts.

You have those who just trade the spread itself.

Thanks so much, as always.

We appreciate it.

We will be on the markets once

This text has been automatically generated. It may not be 100% accurate.


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