Brannigan Barrett, CIO of Habitus Capital, makes his Real Vision debut with a bullish trade idea on gold. He suggests going long the yellow metal in euros, noting the deteriorating economic data in Europe. He also points out key levels for traders to watch for, and touches on risks to his trade, in this interview with Roger Hirst. Filmed on April 12, 2019 in London.
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Using the Euro to Trade Gold (w/ Brannigan Barrett) | Trade Ideas
For the full transcript: https://rvtv.io/2Grg9el
Welcome to Real Vision's Trade Ideas. Today we're with Brannigan Barrett of Habitas Capital. Brannigan, it's your first time on Real Vision Trade Ideas. Could you tell us a little bit about yourself?
Hi, Roger. Yes, so I've been trading now for eight years, pretty much predominately proprietary. 2017, started my own fund. Got two guys working with me and yeah, we're developing some really, really good things, a combination of automated, discretionary, and a whole bunch of fun things. But yeah, looking forward to explaining my trade idea to you today.
Great. And today, you're looking at gold, which is one of the favorites on Real Vision. It comes up quite a lot. But this is gold with a slight twist. Could you explain what your trade idea is, the twist, and maybe break down the trade idea itself as well.
Cool. So yeah, we really like the idea of being long gold. But we don't really like being long gold in dollar terms. So we've had to look at how we can find sort of a natural hedge against further sort of movement in the dollar. So what we're looking at is actually gold in euro terms, for a number of good reasons as I'll explain to you as we go forward.
But we're looking around the 1150 area for entry points. We've got a good 5% stop, so somewhere around the $10.75, and looking for a move to at least break above that 1300 and potentially even target 1400s, which is sort of record highs. We've never really been above there.
So it's a trade that's got sort of 5% downside, with roughly 10% to 20% upside. So really good risk reward metrics. And like I'll explain to you, some really good synopsis to it, which was why we like the trade.
OK. So if you could break that down. So you're effectually long gold in euros. So you've got two components, you're effectively long two things or long one thing and long short another thing. Could you break those down and then we'll pick on each part of that.
OK, so, I think the place to start is why euro? OK. If we look at the euro now, one of the first charts we sort of want to bring up is having a look at Europe versus Japan. Now if you take a close look at it, there's a lot of similarities between what happened to Japan in the '90s, and what's happened to Europe since the financial crisis.
And, you know, if you go and look at the actual fundamentals of Europe, and you look at the growth metrics of Germany, France, Italy, you'll note that we've never fully recovered. I mean back in the day, Germany was capable of 2 and 1/2%, 3%. Nowadays, they're forecasting 1% for 2019. Same for France. And Italy is going to grow at 0.1%.