long of gold in euros

Discussion in 'Economics' started by billyjoerob, Mar 7, 2013.

  1. clacy

    clacy

    Bingo. He's expecting gold to appreciate more against EUR than the USD in all likelihood.

    I would suspect he anticipate that the EU will eventually have to join into the currency depreciation game.

    I believe he's right.
     
    #11     Mar 7, 2013
  2. zdreg

    zdreg

    "long gold in euros"
    i guess that expression means he expects gold to up and the euro to go down in value.
    correct?
     
    #12     Mar 7, 2013
  3. Visaria

    Visaria

    No, he expects the price of gold expressed in euros to go up.
     
    #13     Mar 7, 2013
  4. Visaria

    Visaria

    #14     Mar 7, 2013
  5. Visaria

    Visaria

    No, he is short euros and long gold.

    Think about it this way. He borrows some euros, exchanges them for dollars and then goes off and buys some gold with the dollars.

    So he owes the bank euros (i.e. short euro) and he has some gold coins in his pocket (i.e. long gold).
     
    #15     Mar 7, 2013
  6. Visaria

    Visaria

    :(
     
    #16     Mar 7, 2013
  7. zdreg

    zdreg

    if he sells the euro/$us cross he is expecting the euro to go down against the $us?
    what am I missing?
     
    #17     Mar 7, 2013
  8. clacy

    clacy

    He's betting Gold will go up more versus EUR than it will go up versus USD.

    He may think gold is going up, and both USD and EUR are going down relative to gold, but EUR will be weaker than USD.
     
    #18     Mar 7, 2013
  9. zdreg

    zdreg

    thanks. is he actually selling the eur/$US CROSS?
     
    #19     Mar 7, 2013
  10. clacy

    clacy

    It's impossible to know for sure. I would take it to mean he literally bought gold, denominated in euros at a brokerage where he held euros.
     
    #20     Mar 7, 2013