Goldman Moves To Underweight On Commodities

Tyler Durden's picture

Nobody could have seen this one coming: "Mounting downside risks to current exceptionally high crude oil prices are leading us to recommend an underweight allocation to commodities on a 3 to 6-month horizon, but we maintain an overweight on a 12-month horizon on tightening fundamentals over the next year....Not only are there now nascent signs of demand destruction in the United States, but also elections in Nigeria, a potential ceasefire in Libya and record market length on contagion fears. Further, softening near-term base metals balances suggest that a stock-out in copper inventories and associated price spikes has now been deferred beyond 2011, and recent gold price strength has pushed us close to our near-term price targets. As a result, we now recommend an underweight allocation to commodities on a 3 to 6-month horizon." Translation: please line up and convert your hard assets for dilutable fiat courtesy of the good folks doing god's work.

GS Commodity watch

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slow_roast's picture

Vampire squid investing in soul harvesting equipment.

spiral_eyes's picture

goldman analysts' phone numbers, eh? prank calls galore.

writingsonthewall's picture

...maybe later tonight some of those Goldman servants will be signing up for "daily sexy ladies .com" and "SPAM ME PLEASE .org" etc.


You never know what could happen.

slaughterer's picture

Two ways to trade silver.

1) Do not fight the Squid.

Every needy PD with its hands out to the Fed will want to crush commodities before June.  This will lower inflation expectations and give the Fed reason to inflate some more through QE3.  KaChing: more liquidity for the PDs.

Strategy: short silver for the time being

2)  Fight the Squid.

GS will want to squeeze all early shorters of sillver to "demoralizing levels" of pain as they have done with short sellers of nearly every absurd high-flying high-PE high-momo stock for the last few months (for which they even often had a very low price target far below the current trading price).

Strategy: ride the GS-induced short squeeze upwards, as GS fades its own analysis and trading recommendation.


slow_roast's picture

However, with the current roundof QE set to end in June 2011, and our US economics team now forecasting strong USeconomic growth in 2011 and 2012, we expect US real interest rates to begin to rise into2012, likely causing gold prices to peak in 2012.


Ermmm...didn't they just reduce their GDP forecast?

Missiondweller's picture

Meanwhile, Goldman traders will be happy to buy BTFD as the sheeple sell.

Obummer's picture

Ladies and gentlemen, fellow Americans, good people of the world. I find again that I must discuss with you a new threat. Remember, I said it before, winning the future will not be easy. Out on the horizon of the future we see obstacles in our path, and now one obstacle rears its ugly head. We have very little time. We must meet this threat before it becomes too powerful.

What is this threat, you ask? Ladies, gentlemen, fellow Americans, the threat is silver. Even worse than a threat, this is a menace.  This silver menace threatens all that we hold dear in America. It threatens our way of life, it threatens our economy, it threatens our livelihoods. The silver menace raises its ugly head in our path and threatens to block our path to the future.  We cannot allow this menace to keep us from winning the future.

Some say that commodities such as silver and gold offer stability in a time of dollar value deflation. This is only partially true.  Folks, the silver menace is much worse; silver only offers value inflation. And as you know, my administration has made it our mandate and the mandate of the Federal Reserve to stamp out inflation.  We will stamp out the silver menace before it grows, before it destroys us with inflation. We will not let the menace stand in the way of us winning the future.

For those who insist on feeding this beast, we will have no mercy. For we know that you are the terrorists we have been fighting for so long. We know that even now you have infiltrated the very heart of America, and are in our living rooms and bedrooms even as I speak.  This is not the America I love.  Rest assured that I will do everything in my power as President of this great nation stop you. With the help of our friends and allies in business we will stop you. Over the next few weeks we will lay out a four step plan to destroy the silver menace.  We shall take decisive action against this new threat to our financial stability and to our Constitution.  Thank you, good night, and God bless America.

akak's picture

"Yes we can!" stamp out domestic financial terrorists!

Chains we can believe in!

4horse's picture

Chains we can believe in!


. . . as the equally brilliant levin is in naming the 4butt4s of causative collapse because of just such GoldmanChains, now to believe in just who should soon be first wearing them inside a fed pen:

1. ButtFor Blankfein

2. ButtFor Paulson

3. ButtFor Bernanke

4. ButtFor Barney


. . . levin said to be next taking nominations butt4 DeutscheBank __as we further wait to believe in that concatenation whose chainreaction might lead to the-missing-links behind the ultimate ButtFor of Causation itself:

1. ButtFor Bauer

2. ButtFor Warburg

3. _ _ _ _ _ _ _ _

4. ButtFor Rubin

I_Am_'s picture

Good one. For some strange reason, instead my eyes, my head started swiveling left to right as I was reading :-)

PrDtR's picture

Can't stop LAUGHING.. soooo good!

Ident 7777 economy's picture

I wonder if the sentences are split - on the real prompters that is - to keep the rhythm 'timed' ...

    "So simple, a caveman could do it"

traderjoe's picture

Enjoy your stuff. Keep it up. Add in a "let me be clear" every now and then. IMHO one of his most condescending catch phrases.

akak's picture

Not nearly as condescending as his constant habit of speaking with his chin held high while looking down his nose at us, as if he is some medieval king disdainfully addressing an assorted rabble of peasants.  In fact, though, probably in his mind, .......

PrDtR's picture

GREAT Speech.. one for the ages!

Dying from Laughter!

President Palin's picture

Yeah.  When GS clients sell their positions, who do you think will take the other side of the trade?  (hint:  they are evil, scum sucking vampire squid, oh, I mean goldman sucks...)

chump666's picture

i mentioned a while back the correlation trade on WTI and Brent would narrow.  Now the sell, it's all China now.  Copper is shaky, oil should sell on the China inflation bust.  Goldman should make cash on selling short re: commods.  hedge funds are dying to sell commods and related FX

knukles's picture

"please line up and convert your hard assets for dilutable fiat courtesy of the good folks doing god's work."

And remember kids, we did tell you that we remained bullish on the longer term, so when we goose the shit out of it after we've sorted out the weak hands, assumed their positions, don't blame us when we change our forecast again and jam the piss out of everybody, including you.
Pssst, wanna piece of candy, dumbass?

NewThor's picture

What kind of candy is it?

akak's picture

A T-shirt I saw recently: "Strangers always have the best candy"

vast-dom's picture

china inflation means nothing given all other variables. goldman are turning out to be a joke with clearly duplicitous contradictory info meant to disinform. 

Goldman needs to be reformed, as does the Fed. But who can/will do this?


NewThor's picture

Jesus Christ. Wolverine or Neo.

Josh Randall's picture

SQUID ALERT - It's a false flag -- they are going to bet against their clients that take their advice like always

LongBallsShortBrains's picture

"Mounting downside risks to current exceptionally high crude oil prices"

He must have missed the call from the other squid this week on crude.

Urban Redneck's picture

"Mounting downside risks to current  exceptionally high crude oil prices"


"We expect the oil market will experience a substantial pullback"

That would be like the imperialist explorer suckering the natives into his deification by demonstrating his awesome command of the universe by hiding the sun with an eclipse forecasted on April 11. 

I thought it was called a calender, but then again I am not doing God's work.  We'll soon see if they are as good at predicting the weather as they are the eclipses. 

CrashisOptimistic's picture

Those nascent signs of demand destruction are just how visible in China?

Big Mac's picture

 The government's extend and pretend gang does not like the way their poll numbers are  dropping so the call has gone out to Wall Street.

 "Shit on commodities or go to jail, but it's ok to buy the dip!"

 "It's a shitty job, but somebody has to do it!"







lsbumblebee's picture

Things that are up but in reverse order make us believe that it should bring pressure underneath the variable outlook that is arising with overall investments in assets, I say assests being weighted in anticipation of the economic recovery as portfolios now become geared towards items not listed but available now with a triple a rated tha tha tha thing wit da bing and a capital p and that rhymes with t and that means trouble, I say trouble if you don't follow our nice advice i'm remindin you twice but no more than thrice get with the goldman.  

mt paul's picture

demand destruction... 

the little wifeys

madden name...

FaithEqualsZero's picture

Bullshit! Translation....Gold and Silver are going up big time....after a minor BTFD takedown.

AldousHuxley's picture

There is a reason why religious relics are usually made with GOLD. Throughout history, churches, kings, governments, have been burned by banksters.

sumo's picture

The Vampire Squid's 12 mo. target for silver is $28.20.

Just when I thought I couldn't feel any more contempt, GS pushes me to an all-time high.

ebworthen's picture


I don't know if the FED will keep up the QE and liquidity but I know they want rate inflation and to crush Precious Metals and alternative stores of value to the Dollar.

How to accomplish this?


Ransom's picture

Thank you TD and commenters of ZH for opening my eyes.

To think, a week and a half ago I thought the congressional circus was the most important economic thing happening in our country.  FML

AldousHuxley's picture

Yes ZH will unhook you from the massmedia matrix. It sucks because it is the reality but at least you now know the truth.


I'm starting to think that ZH is either operated by Russia Today or by US government itself to figure out who to jail after when martial law is called for.


Mike Cowan's picture

My mother has a ton of silver hoarded away, and she ain't selling.

chet's picture

Thanks for the impartial advice, Goldman Sachs!  You're always looking out for my best interest!

Bay of Pigs's picture

Less than 1 or 2% of Americans has any idea what the fuck is going on anymore. Nothing but clueless stooges and a bunch of deer in headlights.

Place your bets accordingly.

jmc8888's picture

I guess this is where the pastor (Billy Blank[s]enfein) motivates you to tithe for the cause.

surfersd's picture

Goldman Internal Email

To: Research

From: Commodity Prop Trading Desk

Positions set

-short front to back in crude spreads

-long copper put spreads 

-short dollar

Wait to announce your bullish call on Pan American, until after you deliver the suitcase to Evo next week. Need to see JP try jam it down and scare sheep out of their physical.

CC: Deliveries - come pick up the sheets for this months silver delivery

It is going to be a tough summer for Blythe.


TheGoodDoctor's picture

How about an AM margin hike? Maybe some Fed Head speak about how QEII is ending? Bernank comes out and says there is low inflation? Perhaps some strong dollar talk too? Hmmmm. BTFD!

NewThor's picture

.....but how does Goldman Sachs feel about investing in Unicorns and Dolphin poop?

ZeroPower's picture

Check out their 3mo p/t on Silver. 24.70. Remember those 25 July puts, 3 months out?


For any paper longs out there, PLEASE hedge your shit.

Richard Chesler's picture

Goldman: current exceptionally corrupt and inept stooges in DC are leading us to recommend an underweight allocation to pitchforks and guillotines. 

Long live the chairsatan!





AGoldhamster's picture

Suggest to not treat GS like an idiot. Suggest not to get carried away by whatever GS - or any other institution or so-called advisor says.

I have done extremely well over last 7 months, well beyond what you think is extremely well - BUT I'm strictly TA led. For me is noise what comes out of the banks, advisors, gurus and even ZH. That tells me this:

TA wise - and also cycle wise - we have still a run north - maybe for another 6 weeks. Parabolic moves. Hyperbolic moves. Maybe 6 weeks, maybe a bit more or a bit less. But I suggest to become highly alert around late May. That will build the H of an SHS.

Thereafter the banks (and GS and that SLV put buyer and ...) will be right again - as major parts of markets will start their route south. No market will be immune - no matter what the so-called gurus will tell you. That move south will last a few months, then a recovery for another few months (building the right S of an SHS - or for other markets the double top) and latest early 2012 the real disaster (deflation monster back) starts.

Keep this chart in mind:

And keep the timing in mind. Print out this post and check whether it will become true. And don't say that you weren't warned early enough.

Mentioning my gains is not for gloating - it's just to get your attention, as I want you to be prepared - as such gains don't come from being often wrong. They come from a pretty good sense and sources for what is to come next. And no I do not have inside information. At least not in the sense you might think of. Though yes in a different way maybe. Cycles is the keyword. See how this comment will close.

And yes - GS will be right - if you have a look at the mentioned time frames! 3-6 months. That is no coincidence. 1.5 more months north (that's where they will sell their stuff) - and then south. And then in around 3-6 months they start buying back. Different markets at different times. For that right S of SHS. Or the double top. Before they again sell into year end. Thereafter the true repeat of the 30s to come. And worse.

Put all the noise makers on ignore - respect the charts instead. The pattern to look for was mentioned above. And study cycles and what happend from 1921 thru 1930. Multiply by 3.

And of course always do your own decisions - as Hammy could well be wrong.  But not often.

April 1930. And no - this is not a misprint. This is around midst of April 1930. That should tell you everything you need to know.

TheGreatPonzi's picture

For what I've observed since 2008, technical analysis is mostly a sect, a Church. There is not any rationality in it (you can't predict the near-term future by looking at the near-term past, whatever the level of complexity of this "looking back" is, as evidenced by nearly all the academic studies made on TA) ; it is neither provable nor refutable, as if you deny TA, TA-adepts will say you're not smart/experienced enough to understand ; and prophets/gurus rotate frequently, each with a totally new technique/version of the story. 

If charts were the secret to riches 

(1) All hedge funds would employ "sucessful" TAists like you and make a killing every year, instead of 10 miserable percents of profits, which are already considered as "beating the Street"

(2) Everybody would be doing TA, as learning geometrical figures and identifying them is a job a 5-year old child can do (and a robot even better). 

I applaud the prediction you made with this message, but if it doesn't come true (like the hundreds I've seen in the past years), I hope you'll have the honesty to admit you're a complete loser. If it does come true, then yes, my consideration for you will sligthly improve, and I'll fully respect you if you're able to have a >70% success rate in a sufficiently long time rate (around 30 years).