JPM and Goldman See $1,800/oz Gold By Year End – Iran, Middle East and Inflation Risks Cited

GoldCore's picture

XAU/EUR Exchange Rate Daily - (Bloomberg)

Gold at €1,355/oz, just 2.5% from the record high of €1,390/oz, is a sign of a continuing lack of trust in the euro and in Draghi’s stewardship at the ECB.

Investment and diversification demand for gold remains robust as seen in the gold holdings in exchange-traded products or trusts rose to a record for a second straight day. The amount increased 2.85 metric tons, or 0.1 percent, to 2,470.67 tons, data tracked by Bloomberg showed.

G21 Gold Price Daily - (Bloomberg)

Research houses, analysts and banks are revising their estimates for year end 2012 gold prices higher.

They believe that concerns about inflation and demands for gold as a store of value should lead to higher gold prices by the end of 2012.

JP Morgan and Goldman Sachs have overnight revised upwards there year end forecasts to $1,800/oz and $1,840/oz respectively.

JPMorgan said in a note that it expects gold to move toward $1,800/oz by year end, citing negative real interest rates in the U.S., sovereign risk in Europe and instability in the Middle East. 

Goldman Sachs sees gold at $1,840/oz by end-2012.  Goldman cite the supply side fundamentals and monetary policy easing which are very supportive. 

So said Jeffrey Currie, head of commodities research at Goldman in an interview with Linzie Janis on Bloomberg Television.

Currie believes monetary policy easing and FOMC pursuing QE3 “will be critical to putting upward pressure on gold prices”. 

Goldman remain most bullish on oil as a trade due to supply issues and the “situation in Iran”.

XAU/GBP Exchange Rate Daily - (Bloomberg)

Bank of America Merrill Lynch said that gold may reach $2,000/oz by yearend.

Bank of America Merrill Lynch analysts Sabine Schels and Michael Widmer said in an email report that gold prices may climb to $2,000 an ounce by the end of the year because the Federal Reserve probably will announce a third round of bond buying.

“Loose monetary policies with a scope for more aggressive balance-sheet use in the U.S. and Europe will keep real rates in most reserve currencies low (or negative) in 2012,” the analysts said. “We continue to believe this will allow investor demand for gold to remain strong.”

Separately, Australia & New Zealand Banking Group Ltd. said there are “upside risks” to its forecast for gold to end the year at $1,720 an ounce. Commenting in a report today, they said that “gold prices are set to continue their rally, and the increasing likelihood of policy action is creating upside risks.” 

Capital Economics see gold rising to $2,000/oz due to demand for gold as a protection of wealth.

The Capital Economics forecast is interesting as they are conservative and were quite bearish on gold up until relatively recently.  

Capital Economics remain bearish on silver and say silver will end the year at about $32 an ounce.

We differ with them regarding silver which we remain bullish on in the medium and long term and believe the inflation adjusted silver high of $150/oz will be reached in the coming years.

A close above $1,700 today could lead to a sharp move to challenge the next psychological resistance at $1,800/oz.

Given the now strong technical and strong fundamentals $1,800/oz and €1,400/oz gold could be seen as soon as this month – rather than by year end.

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Mudja's picture

Ahoy! It be a golden Whale!

Bansters-in-my- feces's picture

Watch your asses...

Gold and silver lease rates went way negative overnight,but are back up today again.

This rate drop thingy usually means a sting comming up cause the fucking PigDogManipulators load up for free,ooops,I mean get paid handsomely to load up .


Fuck you's bankers.

Meesohaawnee's picture

im so touched and warmed hearted at GS giving me free advice.. its the cuddly thought that counts

Zero Govt's picture

Blankfein is on our side, Dimon too ..we can see how well their advise did Greece

blueridgeviews's picture

I see gold at 1800 by next week.

MrBoompi's picture

If JPM and GS are "predicting" the price of gold to be $1800, the price will actually be much higher or much lower.  They don't make money by handing out accurate forecasts to the public.

MGA_1's picture

I typically consider a goldman bullish forcast for gold a signal for the short sellings, but this might be a little different this time...

Hoody Who's picture

$1800 before year end?  How about $1800 before sunset today!!  LoL

Zero Govt's picture

"Gold at €1,355/oz... is a sign of a continuing lack of trust in the euro and in Draghi’s stewardship at the ECB."

Er, if it was a growing lack of trust in the ECB triggering Gold investors wouldn't Gold have been climbing higher rather than tanking and bottom bouncing over the last 12 months GoldCore?

"JP Morgan and Goldman Sachs have overnight revised upwards there year end forecasts to $1,800/oz and $1,840/oz respectively."

Got any more tips from Mack-the-Knife for the horses running at the 3.30 at Sundown Valley?

Are you wearing your wellies when you shovel this stuff our way?

"....we remain bullish on in the medium and long term and believe the inflation adjusted silver high of $150/oz will be reached in the coming years."

Well I wouldn't want to spoil your fleeting moment when Silver hits $150 Oz for 5 minutes on a trading screen but i'd just like to point out there's over 1,000 trading days between here and that point of (oh so brief) euphoria.

You musn't fixate on one price point GoldCore, your whole life (and wealth) might disappear before your very eyes while you wait years for your fixation point.

My tip, go outside, take a deep breath, see a Doctor, then focus on the next 4 weeks trading, not 4 years.

Let's deal with the here-and-now and see if your advise holds water

Arnold Ziffel's picture

Silver $60 and gold $2,100 my advisor says is possible due to the massive printing that's about to occur.

Here is a bit from The Daily Reckoning he sent me:

"The answer is due to Europe's grand new plan, the Outright Money Transactions (OMT) programme. The Financial Times sums it up this way:

'[European Central Bank president,] Mr Draghi said the bank could potentially buy an unlimited amount of Eurozone sovereign debt with maturities of between one and three years.'

So there you have it. In effect, the ECB will print money to buy bonds from debt-laden Eurozone countries.

More free money."

Alpo for Granny's picture

Fuck you JPM..I hope you see bankruptcy by year end. You silver manipulating sons-a-bitches!

new game's picture

oh don't forget nadler smadler.

standing there with his arms crossed like some pompus know it all - another fuck head.

ever notice how humble the people are that are truely correct and stand bye their convictions; like murry and sprot...

new game's picture

Ok see if i got this correct; these analists say its going up AFTER it starts to go up. yea fucken right on ruffus.

were they not just doing a gartman; oh and where is that looser?  he must be sayin 2000 bye bye now-fuckin idiots and gamer fuck heads...

Zero Govt's picture

the Mac-the-Knife tipsters have been tipping Gold right throughout this tanking and bottom bouncing season ...KWN in particular are hysterical, they make religous zealotry look sane

No Euros please we're British's picture

As I'm guessing JPM and GS have some of the largest short positions in gold, they can set the price where they want. If they claim $1800 by year end, you can bet they're planning another smack down to $1500 (or should I say, another buying opportunity).

They've somehow managed to stop the Indians buying physical this year, but they'll never stop the little guy with the big canoe.

Ghordius's picture

that "somehow" was a special tax on gold they retracted after a jeweller's strike

No Euros please we're British's picture

Ghordius, that tax was very short lived though, not enough to cut buying by 30% on the year. Last year the gold price was higher so price can't be the real issue? I know they've let the currency weaken to make gold more expensive locally, but even so, 30% is a lot of gold. How strange that this 30% "slack" was taken up by China and Russia without affecting the gold price.

I also wonder about the request from the Indian government for the US to increase supply of liquid shale gas. I wonder what might make the US more amenable to this request.

Ghordius's picture

No Euros please, we are British: now I got my wits together.

of course the falling rupee had a big role, but I already argued here that a tax on gold sales diminuishes the official gold sales. In a country where gold possession is so strong, there are enough people willing to exchange rupees to gold and gold to rupees or whatever else without using any official channels and paying taxes. so the tax, IMHO, just drove part of the market in the underground.

what the Indian Government wanted to decrease was gold imports, and this is a different figure, although I expect there is also a "black" percentage.

so all in all 30% is a big figure, but if you split it in 10% real decrease and 20% "black" then it's explainable

Ghordius's picture

(edit: found your argument more convincing than mine) yes, agreed. lower rupee had probably the biggest impact, though 30% is a lot. LOL, I love your nick!

Henry Hub's picture

There seems to be a wide spread agreement that gold is going higher. This make me nervous. Gold has usually climbed a wall of worry. Still long for now, but keeping an eye open.

NotApplicable's picture

Occasionally though, the idea of gold being the flight to safety becomes a "no-brainer," even to the herd.

At least until the next liquidation/raid/CNBS hit-piece.

El Oregonian's picture

"There seems to be a wide spread agreement that gold is going higher. This make me nervous"

Huh? So with this logic does gold going lower then make you un-nervous? Because then by losing money it makes you happy? WTF?

DavosSherman's picture

They are total clueless fucking morons.

It'll (the "dawler") snap.

TrillionDollarBoner's picture

sounds short-term toppy. but I'm not selling.

AllThatGlitters's picture

Yep.  I'd normally take a "bullish" prediction from GS as a sell signal.  

However, this time, their target doesn't provide enough upside to excite the muppets.  GS and JPM gets to keep buying (or covering) without interference from the muppets.  

GS gets to be "right" on the call, while continuously raising their forecast a little bit at a time, but not enough to induce the muppets to buy.

Once GS comes out and revises their forecast to $5000 after gold has already tripled, then we can take it as a sell signal. 

AllThatGlitters's picture

Then again, this wonderful bit of news comes out *AFTER* gold did this: