Goldman marked itself as a bull on EUR/USD in its Global viewpoint publication on Wednesday. The bank is now predicting 1.5500 in the next year. Of course Goldman’s appalling call targeting 1.1500 in early June, when the spot was at its lows, got everyone’s contrarian indicator bells ringing. Everyone is entitled to the occasional erroneous prediction – even our favourite investment bank – but the rally does feel relentless: USD/CHF is at an all time low; USD/JPY is at a 15-year low; and now, to the detriment of my pee-in-the-wind FX account, EUR/USD has sailed imperiously through the 61.8% retracement of the move down from 1.5144.
However, I’m not yet ready to join the trash-the-dollar, embrace-the-risk club. There are still some strange things happening that make me nervous. One is the price of gold, at record highs of almost $1,350 an ounce as I write; it even featured in The Sun’s page 3 ‘News in Briefs’ section on Wednesday. Peta, 23, from Essex, was so distracted by the price of bullion that she’d forgotten to put on her clothes; indeed she had “...noticed gold futures reached a record $1,340 an ounce after recent market volatility boosted demand for the metal.”