Gold Surges Above $1250 On Weak Data, JPM "Buy"

大鱷收夠貨啦 ? 出來叫沽股買金 !

www.zerohedge.com

Extending its gains from yesterday, gold has broken back above $1255 - near 13 month highs - breaking out of its one-month triangle, following weak data this morning (ISM/PMI/Factory Orders) and JPMorgan's "Buy Gold" warning.

The barbarous relic is in high demand this morning...

Breaking out of the one-month triangle...

Pushing near 13-month intraday highs.

JPMorgan Goes Underweight Stocks "For The First Time This Cycle", Says To Buy Gold 

Our portfolio is now 5% UW Equities, the first UW this cycle. We retain a 10% OW of Credit, moving Bonds to Neutral, and Cash to OW. Commodities stay UW, but we move it to a small -1%, given recent momentum and volatility. Within Equities, be OW defensive sectors. Given that our risk focus is now switching from Chinese debt to US corporate caution, we go OW EM equities. In Credit, OW US HG, US banks, and sterling HG against EUR and EM. In Commodities, be short gas oil and base metals but OW gold.

Equities, credit and commodities have all rallied in the last three weeks, as some of the immediate threats to the world economy have faded from attention, possibly only because the bad earnings season has wound up. But, to us, the fundamentals of growth, earnings and recession risk have not improved, and if anything have worsened. We remain wary of the near-empty ammo box of policy makers.

Our 12-month-out US recession odds have risen to 1/3, while equity-implied odds have instead fallen to near 1/5. But even with no recession this year or next, we see US earnings rising only slowly by low single digits and see little to boost multiples. The eventual recession should bring US stocks down some 30%, creating a strong downward risk skew to returns over the next few years.