Initiated a short position on XAUUSD.
Some may call me crazy but hear me out.
Current XAUUSD is spot gold.
So you are trading trading gold against the USD.
This means there is carry trade financing involved.
So when you go short on XAUUSD, you earn the USD carry.
Which, in Saxo, pays close to the Fed rate of 5%.
Fundamentally, gold will rise when uncertainty in the world rises. And that’s what’s happening right now with wars and the markets showing signs of fear. But a lot of this has been priced in. The war in Ukraine has gone on for more than a year and a half now and gold still went down to test 1,800.
Last night’s jump was spurred more by recent events and Fed speakers saying that interest rates will not hike in Nov. This is not a cut call, and I expect interest rates in the US to stay stubbornly high next year.
Also people are also moving to cash. That’s why the USD continues to stay so strong. Why take more risk when you could just earn 5% with low risk?
That’s why it is my personal opinion that gold will go down to 1,600 - 1,700 over the course of next year.
No comments:
Post a Comment