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JPMorgan Sees Gold At $1,800 By Mid 2013 As South Africa “In Crisis” And “Escalating Instability” In Middle East

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Gold fell $11.70 or 0.7% in New York yesterday and closed at $1,664.80/oz. Silver slipped to a low of $31.09 and finished with a loss of 1.66%.


Gold Spot $/oz, 60 Days, 30 Minutes – (Bloomberg)

For the month, the falls yesterday led to gold being 0.4% lower in dollar terms in January. It was also lower in euro terms but eked out strong gains against the pound and Japanese yen both of which saw falls on international markets.

On the week, while gold is lower today it looks set for a small weekly rise in dollar terms and by more in other currencies. It is currently 0.45% higher in dollar terms and 0.35% higher in sterling terms but has seen stronger gains in other paper currencies, 1.1% higher in euro terms, 1.9% higher in yen terms and 2% higher in Swiss franc terms. 

While the euro has strengthened against the dollar and pushed the dollar index to its lowest level since the end of December – both currencies look vulnerable to further falls against gold in 2013.


Gold Spot $/oz, 5 Days, Tick – (Bloomberg)

A higher close this week may help the negative technical and overall sentiment towards gold due to the recent price weakness.

U.S. nonfarm payrolls are published at 1330 GMT and a negative number should see more safe haven gold buying as was seen after the poor GDP number this week. 

The CME Group said it will add platinum and palladium options onto its Globex electronic platform starting towards the end of February. They intend to cater for the increasing investor interest in platinum group metals. 

New research confirms that having gold in a portfolio acts as a currency hedge and will protect investors from currency volatility in emerging markets.

The World Gold Council, examined eight periods of “crisis conditions” and found returns from portfolios that included gold in hedging were 2.4% higher than investments lacking measures to counter exchange-rate risk. Gold beat currency hedges by 1%, according to the Council.

Economic growth in emerging markets, along with “aggressive” monetary policies in developed countries, led to increases in interest-rates disparities and more expensive exchange-rate hedging costs, they noted.  

The World Gold Council has long been at the forefront of providing excellent research showing gold’s importance as a hedge, diversification and store of wealth for investors and savers.

JPMorgan Sees Gold At $1,800 By Mid 2013 As South Africa “In Crisis” And “Escalating Instability” In Middle East  
J.P. Morgan Chase & Co. said gold will rise to $1,800 an ounce by the middle of 2013, with the mining industry in South Africa “in crisis,” according to Bloomberg.

South Africa, once the largest gold producer, faces industrial unrest, high wage inflation and adverse regulatory changes for local mines, Allan Cooke, an analyst at the bank, said in a report dated today.

Gold will get a boost from prospects of more stimuli from the U.S., Japan and Europe, the potential for escalating instability in the Middle East and low interest rates, according to the report.

Geopolitical risk from the Middle East and the risk of war between Israel and Syria and Iran remains seriously underestimated by market participants and will provide support for both oil and gold. 

Only yesterday the crisis intensified after Israel stepped into the Syrian conflict by bombing the outskirts of Damascus. Russia condemned the attack and Syria has threatened retaliation.

GoldCore's Webinar on Gold and Silver in 2013
Dominic Frisby, Money Week’s gold expert, and GoldCore's Head of Research, Mark O'Byrne conducted a one hour webinar on Wednesday which discussed the outlook for gold and silver in 2013 and beyond.


Central Bank Gold Buying May Lead To Higher Prices in 2013 – GoldCore Webinar Slide

Frisby and O’Byrne presented a series of interesting slides. Both remain bullish in the long term but were cautious about the short term – primarily due to the poor recent technical action.

The webinar was extremely well attended and question and answers were again increasingly popular. Some of the interesting and important questions posed to both Frisby and O’Byrne included the following:

>> What is your opinion of the reasons for the German gold repatriation & why do you think it is going to take 7 years to do so?

>> What is your opinion regarding tungsten gold bars?

>> Do you believe the gold market is manipulated by bullion banks and central bankers who do not want to see gold going up? 

>>  If metals are going so high why only recommend 5, 10, 15% allocation in portfolio?

The  webinar can be watched and listened to by registering to view the recording at this link

NEWS
Gold headed for weekly rise; US jobs data in focus - Reuters

Gold futures rise ahead of U.S. jobs data – Market Watch

COMMODITIES - Profit taking hits grains, gold; index up 3% in January – Reuters

LBMA, IGE urged to end Iran-Turkey Gold trade – Bullion Street

Gold Seen Countering Emerging Market Currency Risk - Bloomberg

COMMENTARY
Gold mitigates foreign-exchange risk when investing in emerging markets – World Gold Council

A Wager on Metal's Silver Lining – The Wall Street Journal

Forget the slowdown in the US – the UK is the real worry – Money Week

The 10 Minute Gold Standard: It’s Much Easier Than You Think - Forbes

Rush To Safety: Americans Buy Nearly Half a Billion Dollars Of Gold and Silver In January – 24H Gold

Video: Should You Buy Precious Metals? - CNBC

For breaking news and commentary on financial markets and gold, follow us onTwitter.

 


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Sat, 02/02/2013 - 11:18 | Link to Comment moneybots
moneybots's picture

"The way things are going, IF the gold standard could be re-introduced, then it would soon have to sell at a billion dollars per ounce, so as to 'balance' the trillions of dollars of financial instruments of mass destruction."

 

People turned in wheelbarows full of Weimar marks for the marks that replaced them.  Money that had no value was replaced with money that did have value.  Gold would not have to be set at a billion dollars an ounce.

Sat, 02/02/2013 - 09:06 | Link to Comment rsnoble
rsnoble's picture

Now wait a minute we bash JPM all the time for making BS calls and now that they've made a call that is in our court we want to rally behind them?

Here's an alternative scenario.......what if the market has a big downturn this year and the dollar rockets and gold plummets?  Don't be surprised if it happens. 

I still don't think keeping a % in pm's is a bad idea just don't bet the farm.

Sat, 02/02/2013 - 09:08 | Link to Comment rsnoble
rsnoble's picture

And don't bother telling me that the dollar will never go up because it has in every market downturn for sometime now.  What would really be a crash is if the market, dollar and pm's go to hell all at once.

Sat, 02/02/2013 - 08:31 | Link to Comment Peter Pan
Peter Pan's picture

JP Morgan can see gold going to $1800 but can they see themselves not interfering in the gold market?

Sat, 02/02/2013 - 12:40 | Link to Comment thewhitelion
thewhitelion's picture

Amen.  If they really want to help, I'd like a daily chart for silver--and they should be able to make one.

Sat, 02/02/2013 - 06:57 | Link to Comment lakecity55
lakecity55's picture

"JP Morgan sees Gold at 1800."

O'Muslim sees Confiscation.

Sat, 02/02/2013 - 06:05 | Link to Comment Setarcos
Setarcos's picture

I've said it before and I'll say it again - though gold bugs will mock me - GOLD is NOT MONEY, unless minted as coinage and stamped with a face value, which may of may not equal the price, production costs, etc. of the metal ... which is useless for exchange for goods and services in ingot form.

IF gold was as gold bugs claim it to be, e.g. as a sound base, store of wealth, etc., then the Roman monetary system would still be with us today, or the Spanish Empire, or the English Pound (OK Sterling-based) and Nixon would not have ended "the gold standard" completely.

The trouble has ALWAYS been that gold could be shaved, alloyed, or "lent out" with paper promisory notes (the origin of modern banking, circa 1400) ... the latter because NO ONE has ever wanted to cart around such a cumbersome metal, at the risk of robbery, piracy, act of war, or just plain accident, such as ship sinking, or aircraft crashing ... hence Germany having supposed gold bullion in New York which, even if it exists, has been hypothecated many times/used as "borrowed collateral" for a myriad corrupt purposes.

Gold is NOT money unless coined and stamped with a face/fiat value.

How do you pay a gold miner for his labour?  Offer gold coins? Laughable when the face value may be less than costs of production

No he wants paying in far more negotiable and stable means of exchange like dollar notes/digital equivalents ... whether or not this form of fiat money has reached its limits. Think of paper being in the nature of an abstract certificate that you have worked for such-and-such hours and so are entitled to exchange your labour for a good, or service another person has worked for.  Or a certificate, like title deeds, that you own some property.  Or that you own shares, or livestock, or anything else.  The modern world could not function without very easy means of exchange ... a function that gold NEVER has performed.

It is, I think, inarguable that our world is in a financial mess; but good luck to you if you think that gold will save you ... it never saved anyone else throughout history ... nor silver, though it's a far more practical form of fiat coinage and copper too.  But NOTHING has been as successful as fiat paper as a comprehensive means of exchange/money ... proof being the petro-dollar and every transaction YOU make whilst shopping for this and that.

All that said: clearly the system has reached its limits, e.g. when 'paper' is no longer paper and when this debt-based travesty of banking fraud/hypothecation is multiples of World GDP.

The way things are going, IF the gold standard could be re-introduced, then it would soon have to sell at a billion dollars per ounce, so as to 'balance' the trillions of dollars of financial instruments of mass destruction.

Finally, to my surprize, it seems that WB7 agrees with me that "gold is not money" ... NOT because Bernanke also said it, for whatever reasons of his own.

Sat, 02/02/2013 - 11:28 | Link to Comment OneTinSoldier66
OneTinSoldier66's picture

I would put it to you that the face value stamped onto a precious metal coin doesn't matter.

 

If a stamped face value matters, then why do I have to pay $1,700 for a government minted gold coin that the government themselves stamped as being valued at $50? The government doesn't even uphold the face value that they put on their own coins. If they did, the coin dealer would be required by (government) law to sell the coin to me for $50. An ounce of gold is an ounce of gold. And to me, legal tender laws are a cruel joke, as is representative democracy through electoral politics.

Sat, 02/02/2013 - 12:02 | Link to Comment Setarcos
Setarcos's picture

Well that's your opinion, but IF in fact you have any gold coins (maybe you do) then I DARE you to go to a shop and see what happens when you present a gold coin.

It matters not one iota what you think OUGHT to be the case, the real world is such that if your gold coin is stamped $50, then a shop keeper will give the same change as he would from a $50 note, because that is legally all he is obliged to do, though maybe he is savvy and equipped to assay the coin by weight and actual gold content, so then he could rip you off knowingly.

Like it or not, you have NO choice other than to deal in legal tender, whether gold, silver, copper, or paper.

You can jump up and down all you like, but you will not change anything (I used to try too).

Personally I don't have a problem with legal tender laws - otherwise (as has happened) anyone can counterfeit currency - but of course I agree that democracy is a farce, as Plato said 2,300 years ago.

Nothing new there, nor with the fact that, for thousands of years, gold has been very strongly associated with crime, corruption, murder, etc..  Nothing 'pure' about gold with human greed for it ... witness the depravity of the American and Australian "gold rushes" a century or so ago.

Sat, 02/02/2013 - 10:30 | Link to Comment Vooter
Vooter's picture

"The way things are going, IF the gold standard could be re-introduced, then it would soon have to sell at a billion dollars per ounce, so as to 'balance' the trillions of dollars of financial instruments of mass destruction."

Not really. For example, if you divide the "real" debt of the United States (current national debt plus future obligations, which is estimated to be around $53 trillion) by the total number of ounces of gold ever mined, you get a gold price of roughly $10,000. Even when you start throwing quadrillions around, a quadrillion divided by the total number of ounces ever mined comes out to around $200,000 an ounce. Hardly a billion an ounce, but I'll take it... :-)

Sat, 02/02/2013 - 10:53 | Link to Comment Setarcos
Setarcos's picture

Splitting hairs.  The sums are so HUGE that it no longer matters with a million or billion dollars here or there.

It seems that Donald Rumsfeld was instrumental in destroying the part of the Pentagon (9/11) investigating the billions of dollars gone missing in the Pentagon budget - or was it trillions of dollars - what does anything matter anymore after 9/11.

Do me a favour Vooter, I really do not want to go down your rabbit hole of strictly this and that ... not when it is simply(?) a fact that unimaginable trillions of digital dollars are "floating in cyberspace" in what has become a virtual global economy.

Why split hairs, when the numbers are totally beyond understanding?

Sat, 02/02/2013 - 12:27 | Link to Comment Vooter
Vooter's picture

Well, it just sounded to me like you were heading off toward the ol' "We can't go back on a gold standard because there's not enough gold in the world" argument, which is nonsense. But if not, hey, sure--no need to split hairs...

Sat, 02/02/2013 - 08:55 | Link to Comment Peter Pan
Peter Pan's picture

Dear Setarcos,

Nothing personal but I think you have some conceptual and other problems, although you sound genuine enough.

1. "NO ONE has ever wanted to cart around such a cumbersome metal". Really? You could have fooled me. People fleeing invaders and conquerors seizing spoils made SURE they took the gold with them.

2. "Gold is NOT money unless coined and stamped with a face/fiat value." Perhaps you might have missed the news recently where Turkey has been paying Iran for oil with gold.

3. "IF the gold standard could be re-introduced, then it would soon have to sell at a billion dollars per ounce, so as to 'balance' the trillions of dollars of financial instruments of mass destruction." I disagree that gold has to be revalued at billions of dollars an ounce. What HAS to happen is for the world to take the brave step of writing off some totally worthless debt so as to flush the system and so as to free decent but unfortunate people from their paper slavery.

4. "gold is not money" Is that so? I have news for you buddy. It's the ultimate in money. For thousands of years it was recognised as the best money along with silver. It just so happened that the dumbing down of the population, clever promotion and debt slavery by the big banks, convenience etc aligned themselves to take the drivers seat in the economy. Well that driver is now taking us over the cliff as you recognise with the words, "clearly the system has reached its limits, e.g. when 'paper' is no longer paper and when this debt-based travesty of banking fraud/hypothecation is multiples of World GDP."

If you google I am sure you will find many a nation's people who have been burned by fiat and who would gladly go back and buy gold if given the chance. From Zimbabwe to the USA, Argentina to Libya,  fiat has left behind some very distraught customers.

If you call fiat deposits in the bank making next to nothing "MONEY", and fiat paper being engineered through fractional banking "wealth" then I suggest you are playing with the fires of hell.

But you know what? If fiat makes you happy, who I am to stop you? At least try and get it in roll format. Good for cleaning a variety of surfaces.

Sat, 02/02/2013 - 09:39 | Link to Comment Setarcos
Setarcos's picture

Dear Peter Pan,

Nothing personal also, but I once used to believe much the same as you do.  But now I am nearly 70 and can no longer believe what you do.

Tit for tat.

If gold makes you happy, then try cleaning some surfaces with it.  Ever heard of the parable of King Midas?

BTW my "fiat deposit" in my bank in Australia currently earns me 5.6%.  Not ALL the world is yet America, though of course Libya HAD to be destroyed so as to impose the US-style central bank.

FFS DO NOT patronize me "dear Peter Pan".  Grow the fuck up little boy.

BTW you are arrogant and a liar for writing "nothing personal" then promptly getting snide - which is why I have replied in kind pup.

 

Sat, 02/02/2013 - 10:57 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

"my bank in Australia currently earns me 5.6%"

5.6% of what?  USD?  AUD?

Sat, 02/02/2013 - 11:31 | Link to Comment Setarcos
Setarcos's picture

Don't be stupid please!

I live in Australia ... maybe you confuse that with Austria, like Ronnie Raygun did.

MY BANK IN AUSTRALIA.

I'll make it simple for you.

I live in Australia and, of course, my deposits are therefore in AUSTRALIAN DOLLARS (AUD).

With me so far (btw Australia is a continent in the Southern Hemisphere, located between the Indian, Pacific and Southern Oceans.)

Sorry for the sarc (not really) but I am sick of Usans being ignorant and agreeing to go to war against countries they cannot locate on a map ... some cannot even locate New York FFS.

Why the hell would I, or could I be getting interest on USDs in Australia?

Sat, 02/02/2013 - 10:00 | Link to Comment unrulian
unrulian's picture

Funny how all the boomers and old, all enjoy our lazy system now that they live fat on the the back of their kids and and grand kids....sleep well setarchos my kids will reflect kindly on your generation for sitting idly by while the system you promote is enslaving them. You will not be looked upon for your contribution to freedom as veterans but for your apathy in the coming crisis that will define their generation. you have not provided us with freedom but have enabled our masters.

Sat, 02/02/2013 - 10:36 | Link to Comment Setarcos
Setarcos's picture

I worked hard all my life, including being a political activist who tried to avert crises I could see coming from the late 70s, with the rise and rise of 'economic rationalism/monetarism', so don't lump me in with your generalizations.

I protested the Vietnam War and every war since, so do not include me in your imaginings of my generation, many of whom at least tried to avert what you are now stuck with.

FYI I live completely independently and do not depend on my daughter, nor my grandchildren.

What kind of swine are you for presuming differently?

What have you done unrulian?

Protested against the invasion of Iraq?  Nope. But I did

Questioned 9/11 and joined A & E for Truth?  Nope.  But I have.

Protested against the war crimes against Lebanon, Gaza, Libya and Syria?  Nope.  But I have.

On the economic front I was warning people, as long ago as 1980, that neo-liberalism would not work ... long before Gerald Celente got going.

What were you doing back then?

OK nothing I did made a blind bit of difference, but at least I tried ... so what are you doing, aside from writing snide comments in ZH?

I have built houses, worked in factories, worked on farms, worked on roads, etc. and it wasn't until my 60s - after prostate cancer - that I had the 'leisure' to explore the internet.

What is your excuse for wasting your time, when you could be doing stuff as productive as I did?

Sat, 02/02/2013 - 02:56 | Link to Comment dunce
dunce's picture

They talk of gold as part of a portfolio, but you can not really take physical possession of DuPont or Exxon. They seem to be touting pieces of paper representing gold when you can avoid  counter party risk  by owning physical. Paper assets can wind up only fit for bird cage liners.

Sat, 02/02/2013 - 02:01 | Link to Comment WTFUD
WTFUD's picture

JPM CME WGC . How come this piece of SHITE non event article warrants a header? Barely recognise the 3rd group but obviously a bunch of tossers who if representing such a worthy product should have outed the first 2 pieces of trash who have between them manipulated every market for years. Probably have same board of directors the inbred fuckers.

Fri, 02/01/2013 - 15:22 | Link to Comment 1eyedman
1eyedman's picture

1800.....but is that on the way up from 1450; or on the way back down from 2100?

oh, just a simple straight line from here, cool thx for the advice jpm

Fri, 02/01/2013 - 15:13 | Link to Comment Pancho Villa
Pancho Villa's picture

I've always suspected that financial analysts have a dart board. Whenever they analyze an asset, they put post-its with various target prices on the board and then throw a dart and see which price they hit. Then they write up a detailed analysis justifying that target price. That would explain their incredible accuracy.

My other explanations involve dice and roulette wheels.

This doesn't apply to technical analysts who (as everyone knows) rely on chicken entrails, star charts and rulers.

Fri, 02/01/2013 - 14:45 | Link to Comment CheapBastard
CheapBastard's picture

I predict Oil to $150 is more accurate based on MENA tensions. Sorry that GS also predicts that...a real jinx.

Fri, 02/01/2013 - 14:23 | Link to Comment Mad Mohel
Mad Mohel's picture

JPMorgan can suck my Bernanke!

Fri, 02/01/2013 - 13:25 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

The CME Group said it will add platinum and palladium options onto its Globex electronic platform starting towards the end of February. They intend to cater for the increasing investor interest in platinum group metals.

 

Here kitty,kitty,kitty...........here kitty.....

Come'ere........

WACK.!

Fri, 02/01/2013 - 12:51 | Link to Comment Meat Hammer
Meat Hammer's picture

Translation: We bankers own the media and the gold market and gold will be $1,800/oz because we just said it will be.  

Fri, 02/01/2013 - 13:23 | Link to Comment Al Huxley
Al Huxley's picture

At some point it's going to be - 'gold is $1800/oz, but that's just a reference price because there's actually no physical gold available for sale, but if there was physical gold available for sale, it would cost $1800/oz'.  We're not there yet, but eventually that's going to be the story these guys are telling.

Fri, 02/01/2013 - 12:41 | Link to Comment zdk45
zdk45's picture

bearish

Fri, 02/01/2013 - 12:37 | Link to Comment Conax
Conax's picture

Setting the gold price is too complicated of a procedure for you greedy little muppets to understand,  so we here at JPM give you an investing tip- and the thanks we get is 'plow it under and grow posies there..'?

Ok for you, but there will be blood in the streets if you don't respect our monetary authoritah.  We are too big to fail, jail, tale or impale, we are crucial to all life here.

We are legends in our own minds.  I still have my cufflinks that say I'm the shit.

 

 

Fri, 02/01/2013 - 12:34 | Link to Comment Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

So, not $2000 by the end of 2012?

Fri, 02/01/2013 - 12:22 | Link to Comment Aegelis
Aegelis's picture

JPM sees credit crash in 2008, too bad it's 2013.

Fri, 02/01/2013 - 12:15 | Link to Comment Al Huxley
Al Huxley's picture

If you can't trust those good folks at JPM, who can you trust.  Now if only Goldman Sachs would weigh in with some supporting commentary.

Fri, 02/01/2013 - 12:00 | Link to Comment SAT 800
SAT 800's picture

The  "escalating instability in the middle East "; is real enough, and no-one seems to be paying any attention. Could cause a nice "pop" in the metals. Meanwhile, I still see good support buying in both Silver and Gold. More than one person, entity, is buying the fuckin dips; the price charts aren't lyin about that anyway.

Fri, 02/01/2013 - 11:59 | Link to Comment Oxygen
Oxygen's picture

Dont you see Gold It was at 1 666 this week. Yesterday night the range of gold was 1 660.60/ 1 666.00. I thing the 666 is a sign, like the bottom of S&P 500, like Appl when it was 666, and after fall like a rock..

So now I think Gold will go higher in a fantastic way.. ( war soon anyone?!)

 

 

Fri, 02/01/2013 - 13:53 | Link to Comment donsluck
donsluck's picture

Funny? Stupid?

Fri, 02/01/2013 - 14:24 | Link to Comment Mad Mohel
Mad Mohel's picture

The latter.

Fri, 02/01/2013 - 11:54 | Link to Comment SAT 800
SAT 800's picture

Americans buy nearly a half a billion dollars in gold and Silver in January alone. Withdrawing dollars from US Banks. Why, that's un-patriotic. we need that money to support the Shock Market, eh, Stock Market. It says, "full faith and credit right on the piece of paper", what could go wrong?

Fri, 02/01/2013 - 11:49 | Link to Comment unwashedmass
unwashedmass's picture

 

geez, the fact that the LBMA seems to be running out of gold and silver, and the Comex inventories are on life support, and every piece of paper they hold short is leveraged 100>1  has nothing to do with this, huh? 

Fri, 02/01/2013 - 11:45 | Link to Comment Seasmoke
Seasmoke's picture

ok i understand JPM.....i will wait a few months for my next purchase at below $1500

Fri, 02/01/2013 - 11:50 | Link to Comment Bananamerican
Bananamerican's picture

Dudes, JPM just said AU isn't going to do jack squat....not the other way around

Fri, 02/01/2013 - 11:50 | Link to Comment Bananamerican
Bananamerican's picture

by the way, fuck jpm...they should be broken up, their corporate hq's levelled and the ground salted where they once stood.

Fri, 02/01/2013 - 11:57 | Link to Comment SAT 800
SAT 800's picture

Sometimes buldings fall down; and no one can explain why. I don;t think you need the salt; wildflowers are nice.

Fri, 02/01/2013 - 11:40 | Link to Comment johnnymustardseed
johnnymustardseed's picture

So the FED gave JPM permission to let gold rise.... I will believe it when I see it

Fri, 02/01/2013 - 11:37 | Link to Comment Volaille de Bresse
Volaille de Bresse's picture

Shit! It means it'll dive to 1300?

Fri, 02/01/2013 - 12:02 | Link to Comment AlaricBalth
AlaricBalth's picture

Does anyone here really care what JPM thinks? I mean, seriously. 

Fri, 02/01/2013 - 13:50 | Link to Comment donsluck
donsluck's picture

Yes, as a contrary indicator.

Sat, 02/02/2013 - 07:05 | Link to Comment lakecity55
lakecity55's picture

HMMM so JPM will say "1800" and then short it.

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