Gold Rush: Double Bottom or a Flight to Safety?

REPLAY VIDEO
Your next video will start in
Pause
  • Info

  • Comments

  • VIDEO TEXT

Jan. 27 (Bloomberg) -- Bloomberg's Olivia Sterns and Bloomberg Tradebook’s Greg Bender put gold futures in focus in "On The Markets" on Bloomberg Television's "In The Loop."

Straight weeks, remember what happened five weeks ago, the fed announced it would taper.

How much of the run-up in gold is down to the fed pulling back.

If you look at the timing, a bottomed on december 31, since january 1, it has been a story of rising gold prices.

Is this just a correction against the bigger their -- bigger bearish trend -- double bottom or flight to safety?

The double bottom, you had a bear trap.

A bear trap happens when you take out a support level on a closing basis, short term trade is rush in based on the barest technical indicator and there is no follow through.

You had rising prices back in, the dollar reversing agents the yen.

Gold looks like it might be a better gauge of fear then the -- than the vix.

Maybe not better, but different.

It acts similar, it will rally on equity request -- on equity weakness, it is quick to get gains when there is a sense of calm in the equity markets.

For anyone looking to buy as a hedge, you need to monetize that hedge fairly quickly, it is not something you can hang onto for a couple weeks.

A different way to gauge fear in the markets.

Something interesting happening with the gold vix, traders getting burned?

Buyers getting burned.

Option traders buy options, getting long volatility.

If they don't get paid implement that -- if they do not get paid and movement, they do not get paid.

We saw a high minus low, $52, in 2014 we have been averaging below that.

Two weeks ago, we had a $21 range.

Last week, with everything that happened, the range was $42. you can look at that as an indication that -- a sense of complacency in bill gold 0. -- in the gold market.

What do forecasts look like?

1160 on the downside.

Short term, if you are going to close at 1270, we could see a run-up back to the 200 and moving average around 1230. how much short covering ahead of wednesday's meeting?

There could be a fair amount, it will be a bumpy ride.

Thank you so much, that "on the markets" in 30 minutes.

"market makers" is up next.

?

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

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change