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Article / 13 December 2013 at 12:16 GMT

Hansen: Downside risk on gold as taper looms

Ole Hansen Ole Hansen
Head of Commodity Strategy / Saxo Bank

"There’s really only one thing that matters for gold and silver; the FOMC meeting". So says Saxo Bank's Head of Commodity Strategy, Ole Hansen, when he talks about what investors should look out for next week. The Federal Reserve is meeting on 18 December, and after getting encouraging data out of the US, analysts believe there's a chance the central bank could begin tapering.

Ole adds that the upside potentials for gold and silver are "fairly limited at the moment", so he prefers to trade the metals from the short side.

Speaking about crude oil, Ole says we’re now entering the low liquidity part of the year, and with the holiday season around the corner, most traders are shutting down their books. Therefore, Ole think the most likely outcome for energy markets next week is range trading; WTI at the 96-99 dollar range and brent crude at the 106-110 dollar range.

Meanwhile, things are looking up for copper thanks to inventories in Shanghai and London being reduced, which is lending support. And an upbeat assessment of global inventories of wheat sent both Chicago (-2,7) and Paris wheat (-2,6) lower. Ole also says Paris milling wheat fell to a three week low as a stronger euro help offset continued strong export demand.

Read more about Ole's predictions here:

13 December
ozy ozy
Mr Ole, it seems now for gold a support from 1220.. Where to go now? to come down again till next Wednesday?
13 December
Ole Hansen Ole Hansen
Gold and most other markets will become more and more sporadic as liquidity dries up ahead of the Christmas and New Year. From here i suspect most of the movements will be dictated by those closing down positions. This could trigger some additional short covering but overall the upside seems limited and i see the greatest risk back towards the low 1200's
13 December
ozy ozy
Thanks Mr. Ole... I'm short in gold, hope to go down 1200s... I wait fed starts tappering Wednesday, I strong believe that...
13 December
mgdogan mgdogan
Ole i have a long april contract from 1255 looking for a touch of 1300 and a older short feb contract looking for 1087. I see a rebound back up by april, what do you think?
13 December
mgdogan mgdogan
Which and when should i close for a loss do you think?
13 December
Ole Hansen Ole Hansen
@mgdogan. I'm not in a position where i'm allowed to offer direct advise. You could however look out for the gold trading ideas being provided and take inspiration from these.


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