See US mkt rally continuing; volatility in gold: ETX Cap

At a time when the US markets are touching all-time highs, Mark Priest of ETX Capital sees continued rallies for the S&P and the Dow Jones. Priest justifies his optimism by adding that valuation-wise US markets are still pretty reasonable.  

"Hopefully we will not see any sidebars that send this market into a fall, but technically we are looking for more buying," adds Priest in an interview to CNBC-TV18.
Meanwhile, Priest believes gold prices will be volatile in the time to come. As gold didn’t see levels of USD 1260 unlike what people were expecting, Priest sees reasonable rallies and then a bit of a selloff for the yellow metal. Below is the edited transcript of Priest's interview to CNBC-TV18. Q: What is expected from the Bank of England (BOE) and how much of an impact do you think it is going to have on the markets?
A: We are not expecting any change in rates. The big question is how much are they going to carry on with the QE. I am not sure we are going to be focusing on Europe or UK. So, we are not really expecting any surprises on rates. But it is important just to hear what they have to say abut the future of pumping money into the economy. Q: Is a different number expected? The purchase was 375 billion pounds. Will it be more than that?
A: The expectation will not be anymore that. I think they are going to stick with that number. Q: What is your general view on the way in which equities have rallied in parts of Europe and certainly in the US to all-time highs and beyond? Even as data has been soft to sometimes good do you think this rally still has legs?
A: If we were looking at some of the PE ratios in Europe and US and we are still offered 2011 levels, I think people are looking at those and are still saying that there is a bit of value left in the stocks. They have been hit quite hard in the last few years. A lot of the numbers coming out of the States have been pretty reasonable and people are gaining more and more confidence from trading these cheap stocks where they are seeing a bit of value. So, we are expecting a continued rally. Hopefully we will not see any sidebars that send this market into a fall, but technically we are looking for more buying. Q: It was a short commodities, long equities trade atleast for the past three-four months. Does that end, because commodities appear to be stabilizing?
A: Looking at gold, which is obviously the one that everybody has been talking about, the talk of USD 1,260 level never materialised. People were saying it was cheap when it went down below USD 1,400. So, we are expecting to see a little bit of volatility in that. We will see reasonable rallies and then a bit of a selloff. So, commodities are a separate entity where people trade in ranges. Q: What are investors talking about in terms of incremental gains from current levels? We have the US markets which have rallied for five consecutive trading sessions. It is not a secret that they are at new highs. The DAX is also at a lifetime high, even the Japanese markets for that matter. From current levels where do you think there is incremental gains coming from and where is India placed within this entire gamut?
A: When we continue to pump money into the economy when figures are reasonable, the next step is to watch the jobless claims and if we get a good number there, then we see no reason why these markets don’t continue to make new highs. Unemployment is one of the major factors. It sets the policy for a lot of the governments. So, if we can get a reasonable number there then we expect to see these markets go even higher.