John J Hardy
Saxo Bank’s head of FX strategy John Hardy takes a closer look at trends and moves in today’s forex charts, including EURUSD, USDJPY, AUDUSD, and EURSEK.
Short term
Trade view / 28 May 2018 at 9:18 GMT

Trade View: Building up gold shorts vs the USD, into the Fed hike

Global Macro Strategist / Saxo Bank Group - Singapore Hub
Instrument: XAUUSD
Price target: 1250
Market price: 1298

Building up short golds vs. the USD, into the Fed hike. In a trade that worked well for the MM book into the March Fed hike, we are looking to replicate what seems to be a high probability pattern in this hiking cycle so far, i.e. the under-performance of previous metals into Fed meetings where there are hikes.

Management and risk description

Short 1x of NAV, so $10m and looking to potentially build that out to 2-3x over the next 17 days... 

Feel the recent break we had on gold taking us south of the $1300, confirmed that in the near term the precious metal may struggle to rise with yields and Fed expectations potentially to the upside.

Key risks of course are the ongoing geopolitical risks in Italy, Spain, Europe, Turkey and of course US/NK. Not to mention a more dovish Fed, poor US inflation print, etc...  





NAV trade of 1x, would need to revisit thesis if we get back above $1330


Targeting $1235 / $1250 range, with a time stop around the Jun 13 Fed hike

Time horizon:


 Charts' source: Saxo Bank

Non-independent investment research disclaimer applies. Read more
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Dougski Dougski
Hmm. Just popped to $1305. Why do I listen?
Could you transfer this strategy to options trading in XAUUSD?


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