Forex Flash: Gold has peaked, beginnings of a new chapter - RBS

FXstreet.com (Barcelona) - Gold value evaporation from recent days should be seen as the beginning of a new chapter in gold, says Greg Gibbs, strategist at RBS, adding that "after the size of the fall in the past two days, we might expect a bounce, but the strategy now is to sell on rallies."

The fall in gold however does make sense, says Greg: "It makes sense because gold is priced in USD and the USD has been broadly strengthening. Not consistently against all currencies at the same time, but against most it is flat or up over the last six months and indeed over the last two years."

Lastly, the RBS strategist adds: "Global inflation may not be as bad as QE doomsayers expect, and for gold measured in USD it ultimately depends on whether you think the Fed will debase the USD. I personally do not. I expect them to end its QE if inflation rises too far and/or if unemployment falls towards their threshold. As such, gold, I think, has peaked..."