Fed is likely to dish out another round of QE given the sluggish macro economic data. However, it is key to watch the job data this Friday as it could delay its agenda of QE. If QE or any other similar measures are taken before the year-end, it is going to hurt US dollars and leads to inflation. Gold will be a good hedge against it.
Another contributive factor to QE is the lingering Euro debt crisis. Despite of German concession, direct injection into troubled Euro countries are only buying the time for Europe. It's critical to watch not only how the Austerity plans are put in place but also any economic reform measures. Without them, it probably takes another 6 months for European economy to turn around. Another event to watch is how soon EU could form a tighter and more centralized fiscal union.
Therefore, in my view, both Euro and dollars are going to weaken for the second half of the year. One cautious note about Gold is that many investors got burned at the end of last year so the rush to safety investment won't be as direct as last years. Treasuries and German bonds will still be a good buy as people want to hold onto safe and liquid assets.
Given the waning demands and the slowing manufacturing around the world, investors are advised to keep away from commodities like oil and commodity currencies like Aussie. Instead, it is worthwhile to take a look at agricultural futures like coca and soybean.
Equity indices don't have much upward pressure in the short term. However, given the possibility of QE, they might go up before the end of the year. It's a question when and where these indices will touch the bottom. Certain sectors of the housing market show signs of improvement and it's a good time to enter REITs.