Jobs Report Won’t Change Fed’s Path: Iaccino

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July 7 (Bloomberg) -- On today’s “Futures In Focus,” Tethys Partners Chief market Strategist Bob Iaccino and Bloomberg’s Kenneth Hoffman discuss Federal Reserve monetary policy and the price of gold on “In The Loop.” (Source: Bloomberg)

Happened last week before the holiday.

We're keeping our eyes on gold as it extends its decline off of the three-month high after the unemployment rating dropped it.

Joining me from princeton is ken hoffman.

Also the chief market strategist at the cme, bob iochino.

Why are we seeing gold prices decline?

Gold has been very interesting.

It is stuck at $1300. it might go above $1300 briefly or below briefly.

It has a dip and take between asian buyers.

It never gets very low.

Gold has been stuck here at $1300, waiting for a reason to break out of this range.

Breaking out is going to look like down, right?

Because the fed may move its interest rate increases forward.

It is still a year off, but is that the case?

I think the u.s. is out of the game right now.

I think you see china is reducing its dependence on financing.

A lot of people bought gold to take advantage of high interest rates in china.

Now the government is ending them.

On the other side, you had the singapore exchange which is about to introduce gold trading for the first time.

They expect that to be a really big deal and that will come out in september.

You have a real push and pull.

I just returned from asia.

Everyone is talking about gold and a lot of traders moving into singapore and hong kong and shanghai.

There was a lot of excitement about gold in asia.

Is the u.s. out of the game here, bob?

On a couple of levels, i don't think it matters.

I don't think it matters to fed policy.

I think the economic conversation is going to continue.

The fed is going to be behind the curve.

I don't think that economic conversation is going to affect the fed.

As you see the dollar strengthened, i think you will see gold suffer from that.

You will see the breakout to the downside a lot of us are looking for.

Having said that, ken's range is dead on.

As a trader, you can trade that range.

You have to be very nimble.

You have to sell rallies and be ready to get out.

Not reverse that, but get out and look for the new range to be set.

What is a big catalysts you look for?

Any potential developments that could move us out of that range?

On the upside, you are looking at geopolitical risk.

People forget the hurricane season.

We have weather risk.

If the weather continues to be absolutely nuts as it has been over the last couple of years, you just mentioned the typhoon warning in japan, china continues to possibly slow.

Other than that, you are looking at a breakout economically.

We have to start looking at the u.s. possibly getting out of recovery mode, potentially moving into expansion mode.

If that happens, dollar strengthens, gold falls.

I want to get to the word of the week.

Open outcry.

Tell us what we think about that phrase in this new day and age of trading.

Open outcry if you have ever seen the movie "trading places" is the people sitting on the trading floor yelling at the prices.

There are very few pits that are very active anymore.

But it is really important.

These traders are often trading for their own books and they're keeping the market in line.

When this all goes electronic, a lot of people are worried that when these traits go electronic, you could see a lot more volatility in the market and people not stepping up to take his visions in the marketplace and that is the big fear and probably the big reason that open outcry has lasted as long as it has.

Thanks to those people keeping that tradition alive.

[laughter] thanks for joining us.

We are on the markets again in 30 minutes.

Matt, thank you so much.

Let's stay in the markets.

Pimco's bill gross has wagered almost $200 million of his own money on a bet that rates are going to stay low.

With friday's surgeon payrolls many banks are going to make the bet that rates will rise.

I want to bring in mary childs the covers pimco for us.

This is another one of bill gross's wild calls?

I think so.

He is making this new neutral thesis very public.

Other central banks will not have the ability to change course.

This is a way to express that view.

If you think that interest rates will stay where they are, that

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


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