New: JPM's Kolanovic likes gold... sort of
Out of Oil into Gold is the commodity equivalent of Out of stocks, into cash.
JPM could be right. But they are bearish Stocks and Oil, not bullish Gold. This feels like a parking spot trade not a position being taken
JPM, after saying nothing aggressive for a couple weeks just posted a large Kolanovic report. Gold factors heavily in it. 1
As to the JPM report we can only say that Gold is largely being used as a safe haven commodity version of Cash here.
I.E.- Out of Oil into Gold is the commodity equivalent of Out of stocks, into cash.
This preserves their Commodity allocation at 4% while taking off the perceived risk of being long oil.
From the report:
This month we raise the cash allocation in our model portfolio by 2%, funded by reducing our weighting to equities and corporate bonds by one percentage point each. Within commodities, we rotate from energy (given recession risks and a potentially fading China growth impulse), to gold following its recent sell-off (on its safe-haven demand and as a debt ceiling hedge)
If you are keeping tabs like we do:
JPM Kolanovic: Structurally bullish, Tactically bullish
Goldman Traders: Bearish liquidating longs last week
BOA Hartnett: Big picture bull, macro Bearish, liquidating longs last week
BOA Clients: Adding to longs
TD Bank: Bullish long on a spec trade.
GoldFix: Secular Bull, Macro neutral, Micro Bearish 2 Sundays ago
Our point is: JPM could be right. But they are bearish Stocks and Oil, not bullish Gold. This is a parking spot trade
More below: