US Dollar: Long-Term Decline, Short-Term Rally

Bullion Vault

A short-term view of gold, the Dollar and energy markets…

The US DOLLAR isn’t going straight down in a line, according to Steve Palmer, president and CEO of AlphaNorth Asset Management.

Forming an investment team in 1998 with Joey Javier, they took three key assets – their excellent track record, experience and belief that exploiting inefficiencies in the Canadian small-cap universe would produce superior long-term equity returns – to launch the fund in 2007.

Now “I’m expecting the US Dollar to rally in the short term and gold to sell off,” Steve tells the Gold Report in this interview…

The Gold Report: Since the last time we spoke, in February, your performance in your fund year-to-date is up, I believe, 138%. Can you tell us what sectors you focused your fund on during this year to produce that type of return?

Steve Palmer: Well, there’s no particular sector focus. The fund is very diversified. It’s about half resource and half technology, special situations and biotech. But we did have a few big winners that really helped. 

TGR: Your fund, as well as the market, has had pretty amazing returns this year. In your August monthly commentary you said you’re getting cautious on equities, given the strong rally. What are you feeling now that we’re in late October? Is there a pullback, or will we continue to move forward?

Steve Palmer: I don’t think the market can go that much higher in the short term. I think it needs to consolidate and pull back a little bit, so we have added some short positions in anticipation of this.

TGR: Many people have said they’re expecting a pullback in the markets, but it never seems to happen. In what timeframe are you expecting this to occur?

Steve Palmer: The next month or two. It’s hard to get the timing perfect, but I think maybe a short-term pullback. Not a major correction or anything, but just a breather and then the markets could likely be strong into year end.

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