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Goldman Does It Again: Firm Top Ticks Record Gold Price To The Penny
If only Goldman clients could receive a penny for every time the firm's sellside advice top ticked the market (to the dot), they would actually be in the green despite following said advice... The most recent blatant example of a concerted sell off following a Goldman "buy" note, occurred at the very peak of the gold move, when the yellow metal had just hit a new all time record high. Sure enough, Goldman, which now apparently caters only to the momentum crowd, decided to use that catalyst as a reason for a note (dated 8:18 am on September 8, note the time relative to the gold price below) to send the signal it was once again in the outright dumping mode.
The price action in gold is promising and I think we are poised for a break into new highs against the dollar very soon. We currently trade 1258 against the prior high in June of 1266. The price action on NFP was particularly revealing and reminded me of a NFP day almost 12 months ago when gold fell sharply 15 usd immediately after the number on both occasions and then turned rapidly to close up on the day. On the prior occasion gold had a very strong rally the following week taking us to new highs for several weeks after.
It remains to be seen whether history repeats itself and perhaps using vol mkt is the best way to express a safer view. Macro positioning is not overtly heavy and we have started to see interest to buy on dips. Comex length is still some way off its highs of earlier this year.The physical market anecdotes are firmer as we move into festival season in India. Talk of strong agricultural harvests are also positive for Indian gold and silver demand.
The macro environment with regard to stresses in European banks and sovereign issues just isn't going away and I think we will see retail and private wealth client inflows into ETFs and bars/coins remain.
The bigger instutional flows have been much slower in allocating than I would have anticipated earlier this year but with summer holidays behind us we may start to get some weightings. At the end of the day the market will need to see these flows if we are to make material gains in future.
From a technical perspective 1266 is the first resistance and I think a break could lead a fairly quickly to 1300 where natural selling is likely to take place. There should be good support now at 1233 which makes a decent stop for short term traders. See Lars option comment below with regards to potential importance of dec 1500 strike expiries.
Good Luck
Zak
Gold options
1m 14.00/15.00
2m 15.75/16.75
3m 17.25/18.25
6m 20.25/21.25
1yr 23.50/24.50
Gold is within striking distance from the old highs back in June. This rally has been very orderly and thus vols are not getting bid up as market seems very content with the direction of spot. The covered call sellers (most recent big seller was 1270's in decent size) seem very relaxed. One of the largest open interest lies with Dec10 1500 calls standing at 24k lots or 2.4mm oz (it is the largest open interest across Oct10, Dec10, Apr11, Dec11 and Dec12 options traded in the market - standing at 5.9% of total open interest across those contracts). Intersting to note that last year the Dec09 1200 was the dominant strike and had enough gravitational strength to pull spot to 1200 by ear end. If this rally extends, the 1500's could easily come into play in the same fashion.
Silver
1m 26.75/28.25
2m 28.25/29.75
3m 30.50/31.50
6m 32.50/33.50
1yr 35.00/36.00
Lars Ahlgreen
Lots of words, yet judging by the chart below, Goldman either is either the worst top-ticker in the history of gold, or the firm has found the most effective way to telegraph when the smart money should be selling gold.
h/t Mike
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so this will be my last friday playlist for y'all. i've really enjoyed putting them together in the spirit of keeping tunes bumping on this fine fine blog of ours. it is a best-of not just of my previous playlists but some of marla's favorite tracks as well :)
freshy fresh (a playlist): http://www.youtube.com/view_play_list?p=B64086D4A6EDA49C
Werd...gets my seal of approval...
Thanks, Steak -- much appreciated. Just what the doctor ordered right now.
That stuff is OK. I'm not much for electronica/trance though. There's not much actual music there.
Muchas gracias Carne Asado.
Nothing like good music, Lowenbrau, and Steak..
Thanks
For those interested in learning more about the work of GATA, bookmark this link and use next Tuesday evening when the interview with Adrian Douglas will be available:
http://www.voiceamerica.com/voiceamerica/vepisode.aspx?aid=48593
No, your blueness!
http://www.youtube.com/watch?v=2AwvRzOh4RA
Best gold contrarian indicators: Goldman calls and Dennis Gartman.
BTW, silver is trading like a champ today. Looks like JPM is having a hard time triggering the longs stop losses.
Silver broke through $20 today. The battle will be to see if it can stay there for a weekly close above that level.
It used to be that gold carried silver; now it's opposite. Ratio down to 30-40 within a year; bet on it.
I have.
It's time......................take possession.
Ooops. You're a little late. Been long physical for over 10 years now. But I know you are there as well. Just joshin' ya.
We have a winner! ---> "or the firm has found the most effective way to telegraph when the smart money should be selling gold."
This is pretty remarkable. Needs to be put right up there with the "short euro at 1.18" prediction from earlier this summer.
That said, all of the points that Lars makes regarding the fundamentals are accurate. The action in gold over the last 24 hours can be solely attributed to The Evil Empire and their desire to forestall a weekly close over the 1267 intraday high from late June. A weekly close over 1267 seals their fate. They've avoided it for this week. With momentum stalling and with the regular top-callers out in full force, they'll probably avoid it next week, too. However, gold will trade through 1267 and onto 1350 before Halloween just as surely as the sun will rise tomorrow. Of that, you can be certain.
OK, so I wait a week to buy more gold. Yawn.
GS can manipulate until the cows come home. But, they are coming home.
To Gold!
Ahoy, Do Chen,
Just bought some more physical after the smack down.
Say hasta luego to Ben Shalom!
BTW: Back in February I googled "Quadrillion" and got 401,000 hits just now if you google the same you get 1,530,000.
Guess what Ben? The people are now switched-on.
Oracle, your example is a perfect reason why I need to Goggle more...
I'll be back at the Gold Store soon enough as well.
Do the exact opposite of what GS recommends. Bearish gold (for the time beings).
So, the rumors are true... it's George Costanza "behind the curtain" calling the shots on gold at GS!
OFFICIAL WALL STREET EYE CHART
http://williambanzai7.blogspot.com/2010/09/official-wall-street-eye-char...
Tough to stay short when we are above the 50-day and 200-day.
Thx for pointing that out, Robot.......above the 50 and 200.
They are talking paper gold... so what!
GLD and SLV will soon be in a race with Ft.Knox to earn the title of "most falsified vault holdings ever".
misinformation is their specialty
we have to acknowledge ...GS knows exactly whatrs gonna happen in the future........i really dont know what to make out of the last couple of predictions by GS though.......they have been BEARISH....but i think only mildly though........not as much as the people in ZH ...
Tense,
GS knows exactly whats gonna happen in the future
There will come one SOON, that will murder their calls, and predictions.
When J6P, starts buying Slvr,GLd, and the panic ensues( and it will,barring a miracle),NO one will be able to make any informed predictions,save one.
UP^
*
You know, Goldman may put out a buy recommendation, which really means buy on the downward pop.....
nahh..
Zeal newletter best on seasonality:
http://www.zealllc.com/2010/autgold.htm
Just a little factoid. GS, per Bloomberg reported a conviction buy on SWHC a few months back. While I did not buy the squid, I did notice that it hit a 52 week low today. How long will you wait. And I do like physical Gold. Dam it GS.
They recommend you buy what they're selling, what else is new =/
smart money never sells gold. Unless you're talking about paper gold, in which case, sell away!
Are you an offficial PR person of Smart Money Union or something?
Keep the physical stuff. Sell the paper.
Exactly right.
NF,
This Selling the paper, and playing the game, is why the PM's mkt has not already OFF charted.
1-100 Ratio, real to paper, if that?.
If the folks trading paper actually bought, Gld & Silver would already be Unobtainium, and easily in the multiple thousands per ounce.
BOTH metals. If they REALLY wanted to make a KILLING, that would be the way to do it..............but those day traders, do it every time.(*:<
Just a thought, what if JPM was shorting SLV Paper, while buying physical. Hmmmm.
I thought they could rig the gold price and never be wrong?
I think we should be concerned when GS sayz: "Hi, ho Silver. Up, up and Away!"
IMO, during the first long leg of the extended bull market, Silver led Gold $4 to $21, vs $250 to $1000. The correction saw again silver leading, back to $8.50ish. Since then, gold has had an upperhand, but if silver will once again take the lead, setting new highs...
Rally on Wayne. Rally on Garth. Silver to $25!
Guys, it was a joke. They are still laughing about it. I mean common! Who the hell buys a double top? while I cannot exclude the possibility that GC will breakout and rally to new highs, you have to keep in mind that gold trades very technically and double-top is just too obvious to ignore. While I'm not short gold, I'm looking at getting GLD DEC flies 111/113/115 so it would payoff if gold drops somewhat (different than just being short)
So in your vast experience this is a double top unlike all the others that gold made on the way up before making new highs? You are telling us that THIS TIME, you are shorting the real double top?
You know what? I don't think so. I see an uptrend and a rising wedge consolidation pattern. That tells me gold is about make several hundred point upward move. You can pretend to be a daytrader. I will double my position. Agreed?
I have no way of knowing where gold will ultimately go as I don't hold monopoly on the truth, but I'm placing my bets for RETRACEMENT in GLD to around 113-114 by DEC. The pattern looks like a double top, and I'm playing it like that.
Take it one move at a time.
1st move is a form of retracement back to the range. If there's sufficient amount of sellers, the range will break-down. If there are not enough sellers, we'll have a move up. But that will be another trade.
I don't have an ego issue, if you want to double your position you shouldn't need aproval from me or anyone else. Take it easy.
This is interesting as GS is the JPMorgan of the new century. JPM was famous for these sort of shenanigans a while back.
It's the secret handshake...buy means sell
They got cramer in on the act. I hope someone alan berg's his ass.
Is there anybody you DON'T want to kill? JFC.
Richard Russell, via King World News:
guys we need to pool together and run through this 1267 barrier
gold snitchez !
Stop the paper shit, and take possession............the Chinese, and Indians, and Asians, Rooskoes are.........
Americans can be so stupid at times, I wonder how we made it 250yrs.
crimex morning shank 3 days in a row...
http://www.kitco.com/charts/popup/au24hr3day.html
Too bad they are down to using 5 dollar foot longs to shank with.
GS has been so wrong on EVERYTHING...yet they make billions for themselves.....how does that work? gee, u think they front run clients and work for the FED? duh.....
What is interesting about this post is that it attracted not one bearish comment about gold (until now). We may be in the quiet period of bullish complacency before concern after the peak...
What is interesting is that there is no end of people like you trying to guess the top of gold based on the most ridiculous reasons.
Does anyone know if JPM issued a sell at 1255? Rumor has it...
It is pretty clear that whenever someone says something bullish about gold, someone else freaks and trys to hose it down. I don't blame GS or Gartman for being always wrong. There are forces out there that get scared when they think the public might come in en masse. But every time they try and stop the run, they just take out more overhead supply at lower prices.
The masses will come, but just not yet.
Thank u, i found this for a long time.
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