Also in this playlist...
This transcript is automatically generated
Asked unfolding in Greece but surprisingly because a lot of people see gold is a flight to safety.
Gold prices are dropping for the last four trading days so our traders abandoning the safe haven assets.
Question Michael Harris is a director of trading at ten.
-- company he joins us now.
-- Michael so what about where is the safe haven money going then why is gold not the preferred asset.
Well I think it's Europe continues to deteriorate.
At with a slight latest cycle where recall what we're in Greece watch now.
A lot of the money is flowing currency wise out of the Euro currency and into the US dollar hurt one of your other guests.
Prior mention that and I think that in environments where people are buying dollars they just don't see -- need to use gold this is safe haven.
We've also seen some flows going into the bond market so people despite.
Extremely low yields are buying bonds and they're buying the dollar so we're just not seeing that safe haven demand for gold in the current environment.
OK but but again what's the replacement is there something else we should be moving into -- that you see a trend toward.
Well I think the thing after remember is this is not a new crisis the European sovereign debt -- -- if you will has been going on for the last two to three years.
And so if you're as an investor you're gonna move out of -- another asset into gold because of the European sovereign debt crisis chances are you did it back in 2010.
If you look at the ATF data many investors are still continue to hold onto those gold positions but on the futures side we're seeing open interest going up as such speculators.
RR are piling -- on the short side.
I think if you look at the technicals.
That holds up and we -- -- long term trend almost a four year trend in gold.
Broke last week and so there's a lot of speculators.
That are thinking that we're gonna see the price of -- gold continuing to fall how far how low can it go do you think Michael.
Well if you take a look at chart over the last six months you'll see that the support resistance levels in the market.
That'd been in place now for the last few months is clearly 1524.
On the bottom and needs you know four on the -- side.
We've had very good support at 1524 in fact today we traded down to around 1526 touching the bottom of that channel.
-- I think if we get through 1524.
He gonna see even more traders piling in on the short side so the market could definitely go through 15100 near term.
We'd be remiss if we didn't talk about oil loyalists also markedly down from its one month -- certainly -- And here's the question you know -- we watch and this is this about a stronger dollar oil is denominated in dollars so when the dollar gets stronger the price would go down or is it simply the people woke up to the fundamentals.
We have a lot of supply and the economy still tentative so people aren't using how much energy.
Well I think it's a combination of the technicals and fundamentals certainly a hundred dollars and WTI was a big level.
Once we got through there and and the trend continue to the downside.
I'm -- systematic models got a short just a few weeks ago we've been holding onto a short position and not market.
But you also have to remember from the fundamental standpoint as people worry about the European sovereign debt crisis there's the fear that demand will be just -- will wilt destruct if you -- in Europe.
There's also some worries about Chinese growth going forward.
And then the real big question is what what what's gonna happen with the ran.
I mean Iran has been noticeably out of the headlines for the last few weeks and I think traders are taking that risk premium out of the market and we're seeing oil falls a result.
Michael Harris director of trading at Campbell and company thanks for joining us.
Filter by section