2012 Gold Averages: Goldman $1,810/oz, Barclays $2,000/oz and UBS $2,050/oz

Tyler Durden's picture

From GoldCore

2012 Gold Averages:  Goldman $1,810/oz, Barclays $2,000/oz and UBS $2,050/oz
Gold is trading at USD 1,592.0, EUR 1,223.30, GBP 1,028.00, CHF 1,491.0, JPY 124,067 and AUD 1,600.50 per ounce.

Gold’s London AM fix this morning was USD 1,593.00, GBP 1,028.34, and EUR 1,222.94 per ounce.

Friday's AM fix was USD 1,589.50, GBP 1,022.84 and EUR 1,218.94 per ounce.


Gold have fallen marginally in most currencies, extending last week's loss, which was the biggest in nearly three months. Gold’s weakness continues despite negative economic news such as Fitch's warning regarding downgrading France and other countries and geopolitical risk after the death of North Korea’s Kim Jong Il. 

Fitch warned it may downgrade France and six other euro zone nations as it believes a comprehensive solution to the region's debt crisis is "technically and politically beyond reach."

Asian shares fell and South Korea’s KOSPI closed 3.4% lower after being as much as 5% down after news of the death of Kim Jong-il created fears of regional instability.

The gold market barely reacted to Jong Ill's death. The death could contribute to further short term weakness and dollar strength but geopolitical instability in Asia should lead to further safe haven demand for gold.

A Reuters poll of hedge fund managers showed how sentiment towards gold remains subdued and negative. Hedge fund managers are negative on gold’s price prospects in the near term with many saying gold will fall below $1,500 an ounce over the next three months.

However, even hedge fund managers are positive on gold in the medium term and believe that gold is likely to retest September's all-time highs – possibly by late 2012.

The industry itself as represented by government mints, refineries, brokers, bullion banks remains more bullish than hedge fund managers. Much of the industry would have an expertise and an insight into the precious metals market that your average hedge fund manager would not.
Managed money in gold futures and options cut bullish bets for the second consecutive week the latest data from the U.S. Commodity Futures Trading Commission showed. This is another contrarian signal that gold is close to bottoming.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged from a day earlier at a one-month low of 1,279.98 metric tons, down 15.43 metric tons, or 1.2% from a week earlier.

While investors cut 13.3 metric tons of gold from their ETP holdings yesterday, the most since Aug. 24, assets are less than 1% below the record set December 14 showing that buyers of the gold ETF are ‘stickier’, less speculative and more passive than many had assumed.  

Options traders remain bullish. The most widely held option gives owners the right to buy gold at $2,000/oz by March. The eight biggest holdings are all call options at 13% or more above prices today.

ETF gold holdings remain at record highs and continuing robust demand for physical bullion and an almost complete lack of selling by bullion owners in western markets on the recent sell off again shows that the sell off was driven primarily by speculators and momentum driven funds and by liquidity starved western banks.

UBS acknowledged the possibility of official sector gold selling – saying that “larger moves were also likely taking place behind the scenes, judging from the considerable market chatter about official liquidation.”

There is also the likelihood that European banks desperate to get hold of dollars were lending or selling gold which was lent to them by “national central banks, or by gold exchange traded funds”, according to the FT.

While demand in India remains subdued, bullion demand in Europe remains brisk and there are signs that Chinese demand has picked up and China is buying the dip.

"In the very short-term, gold below $1,600 is very attractive within China," UBS noted today.

"This can be seen from the sharp increases in Shanghai Gold Exchange volumes last week. Combined SGE turnover last week was the strongest since mid-March and SGE premiums versus London hit $21, premiums not seen since mid-October” said UBS’ Edel Tully.

Central banks are also almost certainly buying gold at these levels as they have been doing in recent months on corrections.

Absolutely nothing has changed regarding the fundamentals driving the gold bull market despite this most recent sell off.

Indeed, the sell off was expected - although the scale of the selloff has surprised some.

The fundamental factors driving the market in 2011 remain the same – the Eurozone and global debt crisis, negative real interest rates and the debasement of fiat currencies being some of the primary drivers.

Rehypothecation and the serious risks that a massive period of deleveraging poses to the global financial and economic system is likely to be a very important factor in 2012 which will lead to heightened volatility but is another positive for gold prices in the long term.

Due to the continuation of the fundamental factors driving the market in 2011, most serious analysts of the gold market have not revised down their outlook for prices in 2012.

Bullion banks remain positive on gold for 2012 with major banks predicting an average gold price of between 13% and 28% above today’s spot at $1,595/oz. It will be interesting to see if these forecasts get as much international media coverage as the poll of 20 hedge fund managers has.

UBS have reiterated their bullish outlook for gold and believe gold will average $2,050/oz in 2012. This is 28% above today’s spot price of $1595/oz.

Goldman Sachs said overnight that gold will average $1,810/oz in 2012 – which is 13% above today’s spot price.

Barclays Capital have said this morning that gold will average $2,000/oz in 2012 – which is 25% above today’s spot price.

Gold will move higher due to “structural pillars of support” in an environment of negative real interest rates and rising inflationary pressures, as well as continued central bank buying.

Given the risks posed to the Eurozone and indeed the UK, gold priced in sterling and euros should experience similar gains - if not more.

The ECB’s Draghi’s warning regarding a Eurozone break up, currency devaluations and the risk of a “big inflation” is a reminder that the price of gold should be considered not solely in dollar terms but also in other currencies –especially were the European single currency to become less single.


(Bloomberg) -- Central Banks May Buy 400-600 Tons of Gold in 2012, Goldman Says
Central banks may buy between 400 metric tons and 600 tons of gold next year, Goldman Sachs Group Inc. said today in an e-mailed report. The metal will average $1,810 an ounce in 2012, and bullion equities may continue to lag the gold price, the bank said.

(Bloomberg) -- Gold Retains ‘Pillars of Support’ in Longer Term, Barclays Says
Gold will average $2,000 an ounce next year and retains “structural pillars of support” in an environment of negative real interest rates and rising inflationary pressures, as well as continued central bank buying, Barclays Capital said in an e-mailed note. Bullion will average $1,875 an ounce in the fourth quarter of this year, Barclays Capital said.

(Bloomberg) -- Physical Gold Demand Growth to Slow in China Next Year, UBS Says
Physical gold demand in China will “remain a big part of the overall gold story next year,” even as the year-on-year growth rate may be slower than in previous years, UBS AG said.
China’s gold imports may have nearly doubled to almost 500 metric tons this year, UBS said in an e-mailed report. “In tonnage terms, that kind of increase could be repeated in 2012.”

(Bloomberg) -- Gold to avg. $1,810/ oz in 2012 on low U.S. rates, risk sentiment, Goldman says in note
Availability of ETFs, easy access to physical gold, poor delivery performance of gold equities have seen them lag gold price; trend will continue said Goldman.

(Reuters) -- Australia's Newcrest Mining <NCM.AX>, the world's third-largest gold producer, on Monday cut its full-year output guidance by around 6 percent, citing disruptions and lower grade ore at mines in Papua New Guinea and Australia.
For breaking news and commentary on financial markets and gold, follow us on Twitter


(Bloomberg) -- Gold Declines as European Debt Crisis, Kim’s Death Strengthen the Dollar

(Reuters) -- Gold weakens after Fitch downgrade warning

(MarketWatch) -- Gold slips after struggle to stay atop $1,600

(Reuters) -- Gold prices will fall below $1,500/oz; May reach record high in 2012
(The Telegraph) -- Eurozone Crisis: Foreign Office Plans Evacuation of UK Expats in EU

(Emirates 24/7) -- Dubai sees gold buying as prices at ‘bargain’

(Financial Times) -- Draghi warns on eurozone break-up


(MarketWatch) -- The East Is Gold? - Asia is Buying

(Barron’s) -- The Silver Rush at MF Global

(Jesse's Café Américain) -- Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global

(KingWorld News) -- Jim Rickards - This Will Send the Price of Gold to the Moon

(ZeroHedge) -- Saxo Bank's 10 "Outrageous Predictions" For "2012: The Perfect Storm"

(ZeroHedge) -- Things That Make You Go Hmmm - Such As Europe's "Comprehensive Solution"

(The Telegraph) -- Video: Gold bullion could 'easily' hit $2,000

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achmachat's picture

it's basically a no brainer.
Once this liquidity problem is over people and funds will be looking for safe places to put their monnies in.

Snidley Whipsnae's picture

Here is an interesting interview; James Turk interviewing Folker Hellmeyer...

Hellmeyer gives the positive spin on EU and currency but during the last ~10 minutes of the interview the topic turns to gold.

Turk points out the highest standard of living in the US was in 1973. Both are in agreement that Nixon taking US off the gold standard in 1971 led to a catastrophic 40 years. Hellmeyer... "Soverign nations will once again return to a gold standard and individuals can only avoid the destruction of their savings by accumulation of PMs... Paper gold games can only be played for a period of time before they self destruct..." paraphrased.



transaccountin's picture

Magic future pump overnight I see. While I slept the magic pump started promptly at 1AM est time for no fking reason, no news.The euro barely budged, but yet we ran up 20 /es points, right ok sure.... .

youLilQuantFuker's picture

You need the USB Buzzer system to wake your ass up when the ramps start. I have one you should too.


XitSam's picture

"2012 Gold Averages: Goldman $1,810/oz, Barclays $2,000/oz and UBS $2,050/oz" 

Is this paper or physical they are predicting?

achmachat's picture

Paper. For them it's always about paper prices. You'll have to deduce the retail premiums yourself.

XitSam's picture

It was a rhetorical queston ...   :)

vegas's picture

What does average price for 2012 mean? Gold trades between $100 and $4,100 then the average is $2,100. Yea, there's the ticket. Point is "average" is anything they want it to mean. And again, how much they paying these guys?



DormRoom's picture

of course those banks would put out those projection.  Alot of them are likely massively leveraged up on the gold collateral trade.  If gold remains in backwardation, I wonder how many players will implode.



Raymond Reason's picture

It's like predicting what the minimum wage will be near-term, medium-term. 

MrSteve's picture

I'm predicting nearly all wages will be minimum for the long-term!

Thunder_Downunder's picture

mmm.. banks bullish gold doesn't fill me with confidence. Especiallly when they all seem to agree... 


So I guess this means we have another 4-8 weeks before gold finds its bottom again....? 

Snidley Whipsnae's picture

"mmm.. banks bullish gold doesn't fill me with confidence. Especiallly when they all seem to agree"


So... We should all find our own version of MF Global to invest in?

There is only one investment that will protect from the ravages of economic insanity, economic fraud, zero legal recourse and pols that are taking orders from bankers.

Who cares what gold does next year? I'm more interested in what gold does over the next ten years.

Thunder_Downunder's picture

Not sure why you're wasting your time on ZH if you've got a 10 year investment horizon. Only 2 reasons to have an MFG account- speculate or hedge. Neither of which is a 10 year horizon.


I would hope you're carrying physical too... if you're gonna park it for so long, you'll probably find a vault is a far cheaper alternative to rolling that leveraged paper every few months... Unless of course you don't really have a 10 year horizon, and you're just talkin the talk.


Either way, I struggle with 6 months, so I salute your brave march into the future! :)

Snidley Whipsnae's picture

I used to speculate in oil, never PMs. Physical only.

The reference to MFG was sarc... I assumed all would recognize it as such.

'talkin the talk'... lol... I began accumulating PMs in 1968. In 71, when Nixon did his thing, I began in ernest.

Believe me when I say that anyone paying attention in 1971 had a fairly good idea what the eventual outcome would be... even though Viet Nam was still raging and was dominating the airwaves daily... and the internet did not exist.

BTW, I am here to read the comments and occasionally add one. If you are continuing to play in futures after the debacle at MFG I hope you are playing with fiat that you consider disposable and I sincerely wish you good luck.

Smiddywesson's picture

Who cares what gold does next year? I'm more interested in what gold does over the next ten years.

Yes, who cares what gold does before the system crashes.  Now that we know that the system is doomed, they can't scare you with lower PM prices.  Physical gold and silver are the only lifeboats.  There are three scenarios for gold and silver. 

1.  Pain: If they don't print, gold and silver go down with everything else until the system crashes and then they skyrocket overnight.

2.  Gain: If they print, gold and silver go up with everything else until the system crashes and they skyrocket overnight.

3.  Down the Drain:  The Fed steps in without warning and flushes the old system.  If they announce a bank holiday and a new gold-referenced system, they can do what Roosevelt did and devalue the dollar by ramping the price of gold (something Bernanke said was on the table in his 11/21/2011 speech).  In that case, gold and silver to the moon.

In all three situations, the only danger is not having physical gold at the end of the old system, or trading paper gold with the wrong mind set.  You can lose your shirt trading paper in situation number 1, thinking gold has to rise because of fundamentals.

If I've learned a single thing over the course of this crisis, it's that when central banks agree and come up with jingles like "green shoots" or "pillars of support," they are about to shove those pillars right up your ass.

Looks like scenario one to me, lower prices ahead and a good opportunity to stack.


sangell's picture

Those hedge fund manager that were polled said that redemptions would drive the gold price down. If that is what is happening then it doesn't say much about their ability to predict anything.

lolmao500's picture

Except if rehypothefication go boom.

And yeah, banks bullish on gold... not good news.

JustObserving's picture

US debt is increasing at the rate of $2.16 trillion a year over the next 4 years and US unfunded liabilities increasing at the rate of $6.55 trillion a year per USdebtclock.org.  So US debt and unfunded liabilities are increasing at $8.71 trillion a year while all the gold bullion in this world is worth about $3.2 trillion (2 billion ounces).

European and Japanese deficits are also increasing by trillions.  Unregulated financial derivatives are now worth $707 trillion.  The fiat money regime is under stress and liable to collapse.  Yet gold remains a tiny fraction of fiat money and financial assets.  This situation will not persist for long.  

Chaffinch's picture

Total gold mined (according to Wikipaedia) is 165,000 tonnes, which is 5.3 Billion troy ounces.

But I don't disagree with the general point you are making.

JustObserving's picture

Most of the gold has been used up in jewelry and is not available to purchase as bullion (only 2 billion ounces available as bullion).  But even if it were, all the gold in the world is currently worth only $8.48 trillion and less than the debt and unfunded debts run up by the US is just one year.

Real estate in China is worth considerably more than $150 trillion. In that perspective, gold is quite inexpensive here.

Smiddywesson's picture

In theory, the availability of gold is no impediment to banks in devaluing their currecy.  The could just announce a gold referrenced standard, and then manipulate the price of gold to the moon (ala Roosevelt).  However in practice, central banks have to have a minimum amount of reserves to do business, otherwise they wouldn't be digging the hole deeper as they stall and buy up gold.  They would have made their move already if they could.

The big questions are how much gold do they need before they take action, or how long do we have before a collapse forces their hands.  I'd also like to know how deep a haircut the holders of currency are going to take, and who loses everything because of default, loan forgiveness, etc.

At this point all we know for sure is central banks are buying gold in anticipation of changing the way they do business and the holders of physical pms are the only ones who are not going to be harmed.  Cash on hand for everyday use will be necessary too.  The last time we played the old gold switcheroo, there were some very angry people.  For example, the military were on hand with machine guns at Roosevelt's innauguration. 

MrSteve's picture

The revaluation of gold and return to a gold based standard presumes a currency or warehouse receipt system (SDR- Special Drawing Rights in IMF lingo) which allows "redemption" in the underlying gold.

It can only work if there is universal trust in the integrity of the receipts. My tin-hat scenario has the central banks responsible for spiking various 400 oz. ingots with tungsten as a kind of false-flag to discredit gold as a reserve currency standard.

After this current unpleasantness, who alive would trust in the integrity of paper receipt-based currencies? A reading of FDR's speeeches show he was always referencing good backing for the money being issued during the economic emergency of his day. Nationalizing gold was the ratiional for loans to pay for CCC, WPA etc social demand-generating programs.

That level of faith no longer exists. When the finance minister of Poland is shown in the news cuddling an ingot of gold, you know something is up and it isn't going to be pretty.

Thinking long term, if it costs about $1000 FRN to feed someone in the USA for a year, an oz. of gold is good for 18 months of food at current food : FRN prices. Two oz. would represent about a three year supply of food. Two oz. per member of your family is a reasonable minimum gold count to be holding. Know that in an emergency, the price of food will go up as the fiat becomes worthless or enormously devalued in a revaluation.

Be prepared to use gold to fund church kitchen soup lines (volume / wholesale prices) where likeminded stewards can feed their families and their neighbors. Starving neighbors are not healthy for you.

ED's picture

I hope my dentist is reading this. Will the price of therapy always outrun the value of gold?

lunaticfringe's picture

Predicting the future, eh.

Sometimes fate just has a way of sticking a boot in yer ass.

chinaguy's picture

But, but according to Reuters: " Gold prices will fall below $1,500 an ounce over the next three months and are unlikely to retest September's all-time highs until later 2012 at the earliest, according to a Reuters poll of 20 hedge fund managers, economists and traders."



Nate H's picture

why is that 'LOL'?

Obviously for every investment bank/hedge fund that predicts $2000 gold, there is one that expects $1100 - at $1580 that is how markets set prices.



Smiddywesson's picture

I don't understand the LOL either. 

Have we not seen, over and over, PMs dropping during a generalized market sell off? 

Have we not seen PM prices manipulated downward even when there wasn't a general market sell off to assist the manipulation? 

Finally, does anyone believe the markets are in good shape?  If not, how likely is it that PMs will suddenly begin to ignore these sell offs, or even if they could, during a sell off where PMs somehow DO manage to resist the selling, how likely is it the manipulators will stay their hand when the tide is on their sides to crash PMs?

Unless they print, the markets will sell off, and PMs will follow.  That's the reality we face until they reset the system.

Ignorance is bliss's picture

Timeline is everything. A day late and you won't be able to acquire PMs at any price. Let's hope the financial games continue for a long time. We can never have enough PMs based on the on-going financial ponzi promoted  by the Govt and the banks. My time horizon for wealth accumulation is well beyond 1-2 years. Do I believe I'll need PMs between now and possible retirement? I think so, just look at the dollar depreciation over the last 30 years. I will not let the Govt or the bankers rip me off any more then I have to. Save the 10 minute bullshit, I'm stacking for the long run.

Snidley Whipsnae's picture

+1... The ONLY course of action that makes sense today.

Smiddywesson's picture

Absolutely correct.  That's why I am still buying when I am predicting prices to continue to fall.  I can't predict when the system will crash and reprice my PMs.  When that happens it will be unexpected to all but the big insider banking criminals.  Everybody will be left with whatever PMs they have, so I scale into lower prices because it's the only strategy that will work.  Bottom pickers beware, the other side of the chart will be vertical and you can bet it will be overnight.

DoChenRollingBearing's picture

+ 1  Yes

Whichever of your (upthread) scenarios happens, I agree that the final spike up (and physical disappearance) will be very fast.  Like you, I buy irrespective of current price.  I just have to have fiats first.

TheSilverJournal's picture

That Reuters article about the 20 hedge fund managers concluding gold is going to go down was serisously EVERYWHERE. Sommmebody must really want that gold price to go down.


LookingWithAmazement's picture

Gold and silver are plummeting. And Bernanke laughs his ass off. Since his Jackson Hole speech on Aug. 27, 2010, gold and silver have spiked significantly above the trendline. But now that bubble is over, confidence returns, the eurocrisishype fades and all the hot air blows out of the PMs. This will make investors/buyers of coins more careful the next time Bernanke comes up with QE: buying PMs in times of money printing, is as dangerous as stepping in in any bubblemarket, like housing, bonds and stocks. So Beardy Bennie can grin and put on his presses, without a new, unmasking spike in the PMs. The fundamentals might look good for PMs, the sentimentals are not.

Al Huxley's picture

Yes, and sentiment's always the best indicator to follow. Because if there's one sure path to investment success, it's 'follow the retail investor/speculator'. Great insight there.

RobotTrader's picture

As usual

ES futures magically levitate

And gold and silver are lagging

But upon any ES selloff, gold and silver selling is magnified 3x at least.

TPTB has pretty much mastered control of all markets now with a flurry of paper.

- Stocks and bonds both up on the year.

- Commodities destroyed

- U.S. Dollar strong as an ox.

- PM's will probably close red for 2011.

Eric King and Jim Rickards are probably kicking themselves for not buying retail stocks, REITs and utilities.

Potemkin Village Idiot's picture

I'm sure you're probably a hit at all the Christmas parties...

Look folks! It's EF Hutton!

somethingisrotten's picture

I really hate to be the bearer of bad news for you NFLX / FSLR Lizard; but gold is up and over 1600 and still very green for 2011 while the S&P is red for the year.

Maybe you will be right on something before the year is up - the old clock scenario you know.

kito's picture

Robo, do you use complex algos to come up with your genius after the fact calls, or is it pure instinct??

Potemkin Village Idiot's picture

Yeah, everyone wants to run to cash so that when they print more money, it'll be worth more...

Sound logic there...

Potemkin Village Idiot's picture

Yeah well I can just see Robo getting a 1 oz gold bar in his stocking for Christmas... He rund over to the coin dealer, exchanges it for cash, puts the money in the bank, then wires it over to his E-Trade account so he can trade NFLX shares with it...

Sounds like a smart guy...

In 2008, when they were unleveraging what has also been a run up in commodity paper prices, don't forget that just about the whole commodity space bottomed out around November 2008... While the S&P bottomed out in March 2009 (and only AFTER they promised to bailout the financial industry)...


Hobbleknee's picture

Gold’s weakness continues...

Yeah, +16% ytd- soooooo weak.

Saxxon's picture

Robo gets the perversity of this market, and gets her rocks off tweaking you guys.

Looking With Amazement presents an unexcited POV; also irritating to many here.

Zero Govt's picture

"The gold market barely reacted to Jong Ill's death."

I doubt the death of Jesus Christ would have one iotas impact on holding Gold either... what's somebodies death got to do with anybody holding a metal/investment for Christs sake?!!!

"UBS ...bullish outlook for gold .. $2,050/oz in 2012... Goldman Sachs ...$1,810/oz ...Barclays... $2,000.."

Looks like a Bullion Bank major Pump & Dump.. here comes $1,400 then

Smiddywesson's picture

Pillars of Support!

Pillars of Support!

All in, use leverage, pillars of support!  Absolutely idiotic.

Screw these guys, slow and steady physical accumulation makes you immune to their machinations.  They want you to trade in their phoney market so they can create a false reality and take your money.

geminiRX's picture

Martin Armstrong has 2012 gold pegged for new lows at the mid 1200 dollar range before beginning it's parabolic advance to the sky. You can read his synopsis at martinarmstrong.org. I would be cautious on being too optimistic.