Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Shyam Devani provides key market commentary encompassing analysis of Foreign Exchange, Fixed Income, Commodities, and Equities globally – both in G10 and Local Markets. He takes a multi asset class approach incorporating fundamental, behavioural, and historical trends as well as technical signals.

Shyam has delivered strategic market insights to a number of trading desks and institutional clients internationally (funds/corporates/banks) through written publications, presentations, face to face meetings and conferences. He has had numerous appearances on CNBC, Bloomberg, and Singapore Radio providing his short and medium term views on markets while being the front office media commentator during his time at Citi.

He has been commentating on financial markets since 2004. Since 2006, he was running one of Citi’s top market products, CitiFXTechnicals, initially in London followed by Singapore where he took a lead role in enhancing the coverage of markets in Asia.

Founder & Chief Market Strategist - SAV Markets

Lower Real Yields with Higher Oil Supports Gold

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Cross Asset Strategy

Multiple Countries / Cross Asset Strategy

Over the past year Gold bugs have not had it easy. While it was a brilliant performer for much of 2020, it is still negative so far this year.A few reasons explain this lack of performance. Firstly, yields have had a two-way street, both nominal and, more importantly, real yields. Yields were initially up at the beginning of the year and then generally down since March. Secondly, there has not been a clear trend on the USD – something that Gold has typically been inversely correlated to. The USD has spent as much time this year rising as it has falling and, depending on how it is measured, it is effectively unchanged to marginally up. The third reason is the emergence of Bitcoin as a viable alternative or addition to other hard assets. Whether one agrees or disagrees about Bitcoin being a serious so called ‘hard’ asset, it is increasingly being seen as such, which has played its role in taking some of the shine off Gold. However, are we approaching an interesting juncture in all three of these corners? We can all see that inflation has started to rise and serious questions are being raised about whether higher prices are short lived &amp; transitory or longer lasting. As a consequence, breakevens have risen faster than nominal yields thus leaving key benchmarks of ‘real’ yields deeper in negative territory. That is beginning to be bullish for Gold again.At the same time, the bounce in the USD has started to lose momentum and there are some signs that it may trend down, at least in some corners. Asian markets look particularly attractive as the continent makes its way forward to some form of normality – something that North America and Europe had already started to do much earlier. For those who may not be familiar, as an example, the environment in which I sit in Singapore still requires one to wear a mask, be in a group of no more than 2, not talk on the train and, enjoy one’s outing without music in venues such as restaurants, bars, cafes etc. There is a long way to go for normality to return to many parts of Asia but it is approaching and as it does, the demand which has been pent up for 2 years will start to show its various colours. Thus, the ADXY Index looks bullish. If anything, a lower USD would support Gold.Finally, there is the strange market of the bitcoin. It doubled, then halved, then doubled again all in the space of 10 months. It is now a market truly driven by feelings and sentiments. Interesting it might be then that the recent high was when the much-anticipated futures ETFs went live last week. So far (and it is very early) it appears to look like a classic “buy the rumour, sell the fact” scenario. What needs to be seen is whether that will be short lived or longer. A slowdown in the rally, a consolidation or a move down in bitcoin would likely be a bullish sign for Gold.Below we look at the price action and setups on all these markets, which should be watched closely while building either a case for, or against, the real hard asset that is Gold.We start with an index that attempts to encompass all three components - real yields, the USD, &amp; Bitcoin…

Over the past year Gold bugs have not had it easy. While it was a brilliant performer for much of 2020, it is still negative so far this year.A few reasons explain this lack of performance. Firstly, yields have had a two-way street, both nominal and, more importantly, real yields. Yields were initially up at the beginning of the year and then generally down since March. Secondly, there has not been a clear trend on the USD – something that Gold has typically been inversely correlated to. The USD has spent as much time this year rising as it has falling and, depending on how it is measured, it is effectively unchanged to marginally up. The third reason is the emergence of Bitcoin as a viable alternative or addition to other hard assets. Whether one agrees or disagrees about Bitcoin being a serious so called ‘hard’ asset, it is increasingly being seen as such, which has played its role in taking some of the shine off Gold. However, are we approaching an interesting juncture in all three of these corners? We can all see that inflation has started to rise and serious questions are being raised about whether higher prices are short lived &amp; transitory or longer lasting. As a consequence, breakevens have risen faster than nominal yields thus leaving key benchmarks of ‘real’ yields deeper in negative territory. That is beginning to be bullish for Gold again.At the same time, the bounce in the USD has started to lose momentum and there are some signs that it may trend down, at least in some corners. Asian markets look particularly attractive as the continent makes its way forward to some form of normality – something that North America and Europe had already started to do much earlier. For those who may not be familiar, as an example, the environment in which I sit in Singapore still requires one to wear a mask, be in a group of no more than 2, not talk on the train and, enjoy one’s outing without music in venues such as restaurants, bars, cafes etc. There is a long way to go for normality to return to many parts of Asia but it is approaching and as it does, the demand which has been pent up for 2 years will start to show its various colours. Thus, the ADXY Index looks bullish. If anything, a lower USD would support Gold.Finally, there is the strange market of the bitcoin. It doubled, then halved, then doubled again all in the space of 10 months. It is now a market truly driven by feelings and sentiments. Interesting it might be then that the recent high was when the much-anticipated futures ETFs went live last week. So far (and it is very early) it appears to look like a classic “buy the rumour, sell the fact” scenario. What needs to be seen is whether that will be short lived or longer. A slowdown in the rally, a consolidation or a move down in bitcoin would likely be a bullish sign for Gold.Below we look at the price action and setups on all these markets, which should be watched closely while building either a case for, or against, the real hard asset that is Gold.We start with an index that attempts to encompass all three components - real yields, the USD, &amp; Bitcoin…

The Renewed Case for Gold