• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Goldman Closes Gold Short

Tyler Durden's picture




 

It appears Goldman (together with virtually everyone else focused on physical not paper gold) has bought enough gold from its clients. Now, there is only upside.

Goldie on gold:

We closed our short trading recommendation on gold

 

We have closed our recommendation to short COMEX Gold, as prices moved above the stop at $1,400/toz. We have exited the trade significantly below our original target of $1,450/toz, for a potential gain of 10.4%. The move since initiation was surprisingly rapid, likely exacerbated by the break of well-flagged technical support levels. Our bias is to expect further declines in gold prices on the combination of continued ETF outflows as conviction in holding gold continues to wane as well as our economists’ forecast for a reacceleration in US growth later this year.

Explains the rip in gold this morning, and why it will continue to do so consider Goldman's "bias" to keep buying more gold from its clients (especially since any forecasts of "reaccelerating" growth now merely spark bouts of uncontrollable laughter). Buy until Goldman says to go long.

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Tue, 04/23/2013 - 07:51 | 3487319 Racer
Racer's picture

How come there are no gold coins to buy for days now if there is no conviction....

Tue, 04/23/2013 - 07:53 | 3487329 achmachat
achmachat's picture

not as easy to find as before... but if you look hard, you'll still find them.

If you can, find a few investment buddies and buy together. You can still get good deals if you buy a minimum of 10 one-ounce gold coins.

Tue, 04/23/2013 - 07:57 | 3487341 maxmad
maxmad's picture

Its very hard to find any gold coins right now... The ones that are available have a huge premium attached!  This is insane!  looks like price controls are backfiring!

Tue, 04/23/2013 - 08:00 | 3487348 maxmad
maxmad's picture

Our bias is to expect further declines in gold prices on the combination of continued ETF outflows as conviction in holding gold continues to wane as well as our economists’ forecast for a reacceleration in US growth later this year.

 

They are so full of sh&t!  If they really expect falling gold prices, they would have held their shorts!  Either liars or Dumb a$$es, you decide!

Tue, 04/23/2013 - 08:05 | 3487366 TwoShortPlanks
TwoShortPlanks's picture

Like a thief in the night.

Tue, 04/23/2013 - 08:22 | 3487411 Harlequin001
Harlequin001's picture

'The move since initiation was surprisingly rapid, likely exacerbated by the break of well-flagged technical support levels.'

Yeah that and a 400 tonne short, but we won't go into that eh, people might get sent down...

Ooops, made myself titter then for a moment...

Tue, 04/23/2013 - 08:41 | 3487465 Pinto Currency
Pinto Currency's picture

 

Harlequin - it is amusing how Goldman writes like no one else has any information.  They might have said

"The move since initiation was surprisingly rapid coming two days after 15 bank CEO's met with President Obama and was triggered by a single 400 tonne (12+ million oz.) sell order dropped on the market by one major bank over 30 minutes which took out major stop losses and artificially cascaded the market when asian markets were closed for the weekend."

Tue, 04/23/2013 - 11:13 | 3488161 Herd Redirectio...
Herd Redirection Committee's picture

And they could have said "And timing is everything in trading, and we somehow nailed the timing, better listen to our advice next time, we are smart and looking out for you"

When gold got hammered down I made the comment that "buy when people are fearful", my buddy tells me "Wait for Buffett to say it".  These people seriously believe these big boys are out there looking out for them???

Tue, 04/23/2013 - 19:50 | 3490850 mjcOH1
mjcOH1's picture

"Our bias is to expect further declines in gold prices on the combination of continued ETF outflows as conviction in holding gold continues to wane as well as our economists’ forecast for a reacceleration in US growth later this year.

They are so full of sh&t! If they really expect falling gold prices, they would have held their shorts! Either liars or Dumb a$$es, you decide!"

Oh ye of little faith. They've obviously left the money on the table as a gift to the muppets.

Tue, 04/23/2013 - 20:58 | 3491079 Long_Xau
Long_Xau's picture

I gotta admit I felt worried up until the middle of the statement. But then I realized they were bearish due to:

ETF outflows as conviction in holding gold continues to wane

BTW what do ETFs have to do with holding gold again? This interpretation makes sense to me: ETF operators are no longer convinced that they should even try to hold any physical gold for their clients.

Tue, 04/23/2013 - 11:30 | 3488273 widget
widget's picture

Imagine if GS was under the honesty spell from "Liar Liar". They would be bankrupt in one week.

Tue, 04/23/2013 - 13:33 | 3489081 Sokhmate
Sokhmate's picture

In your bra.

Tue, 04/23/2013 - 09:03 | 3487516 fomcy
fomcy's picture

Even this doesn't help, they still f**king metals every morning, so far $10 been eating since AM. Everyday same sh*t, and those crooks not letting Americans trade Gold/Silver on Forex platform, otherwise due to this manipulation there never been much easier trade, Wake up at 6:30 AM push SELL 1:20 PM close short. Day after day. Friday Biggest drops always. Crimex GOLD trade is an ATM.

Today target 1402-1405 by 1:30 PM Manipulation? Of course, If everyone knows that in 8:20 AM it must
drop and when it's going after that
what kind of "FREE" Market is that? ATM machine.

Tue, 04/23/2013 - 10:04 | 3487914 Meat Hammer
Meat Hammer's picture

So what you're really trying to say is keep stacking.

Tue, 04/23/2013 - 11:17 | 3488182 Herd Redirectio...
Herd Redirection Committee's picture

Yeah, they are trying to condition people, that the easy money is in TRADING GOLD, not holding gold.  Sell in the morning, and buy at the end of the day, will make you some money, but you are being co-opted by TBTF, you are helping them.  And the day that the paper gold market dies, don't think they will tell you to buy physical on that day, either!  You will lose your ass with a paper Gold short on that day.

Tue, 04/23/2013 - 08:43 | 3487478 TeamDepends
TeamDepends's picture

There's a muppet born every minute.

Tue, 04/23/2013 - 08:21 | 3487417 Croesus
Croesus's picture

@ Maxmad:

My friend, everything is up to interpretation.

Ignore the rest of the "noise" in their statement. The first 4 sentences are basically GS telling the world how great they are. As you correctly pointed out, the sentence starting with "our bias" is hypocritical bullshit.

But there is a grain of truth in it:

"Our bias is to expect further continued ETF outflows"


 

 

 

Tue, 04/23/2013 - 08:29 | 3487435 Harlequin001
Harlequin001's picture

Now I have a question for you, if silver spot is $23 ish and I can buy real silver for $28 ish, what is the premium say against corn, or oil.

How much are these other 'stuffs' actually trading at over spot, and why?

Tue, 04/23/2013 - 08:37 | 3487457 Croesus
Croesus's picture

@ Harlequin001:

I can't tell you, since I follow the Gold market, almost exclusively.

Tue, 04/23/2013 - 08:54 | 3487526 maxmad
maxmad's picture

Very true if you look at gas, we are paying such a high premium compared with the spot Brent Crude its sick!  But you have consider things like taxes, deliery costs, forward costs, etc... They make it virtually impossible to fiqure out the exact premium charge on certain commodities such as gas.

Tue, 04/23/2013 - 10:14 | 3487950 Pinto Currency
Pinto Currency's picture

 

Croesus,

re. "Our bias is to expect further continued ETF outflows"

Agreed.  We can expect to see the ETFs drawn-down as investors take physical delivery. 

Tue, 04/23/2013 - 12:40 | 3488682 Croesus
Croesus's picture

@ Pinto Currency: 

The demand side for Physical Gold, is almost unreal. Two Short Planks had a post yesterday, where he summed it up, perfectly:

Quote: "You think the squeeze is tight now...LOL...you haven't seen anything yet. Try to imagine a Gold Market where Central Banks are scrambling to repatriate their Leased Gold as well as a Retail Market hell-bend on buying physical...it won't happen...THEN, try to cope with the prospect of the general public - fuelled by MSM - getting into the market."

RE: http://www.zerohedge.com/news/2013-04-22/bill-fleckenstein-hold-tight-yo...

Fundamentals do matter, in the real world, contrary to what some may think. The fundamental demand for physical Gold, virtually guarantees that its relative purchasing power will eventually be multiples of where it is now.

 

Tue, 04/23/2013 - 10:50 | 3488068 Kirk2NCC1701
Kirk2NCC1701's picture

If there's one thing the Squid is NOT, it's "dumb". More like "crazy like a fox".

Tue, 04/23/2013 - 11:24 | 3488228 Confundido
Confundido's picture

Liars.

Tue, 04/23/2013 - 07:55 | 3487330 GetZeeGold
GetZeeGold's picture

 

 

Got a briefcase full of IOUs. Trade it with you for some gold.

 

I'm talking real gold.....not COMEX Gold.

Tue, 04/23/2013 - 08:10 | 3487386 new game
new game's picture

i might be interested in the briefcase...

Tue, 04/23/2013 - 09:44 | 3487818 therover
therover's picture

Let me guess the combination of the briefcase....007

 

GOLDFINGER ! 

Tue, 04/23/2013 - 10:52 | 3488077 Kirk2NCC1701
Kirk2NCC1701's picture

Yeah, more like a Briefcase Full Of Blues.
Where have I heard that song before?

Tue, 04/23/2013 - 07:56 | 3487336 Sheeple Shepard
Sheeple Shepard's picture

 

 The finest economic "brains" in the world people:

"The International Monetary Fund (IMF) has been hosting a conference on rethinking economic policy, organised by four experts in the area, including the IMF's own chief economist.

One of the other organisers - the Nobel Prize winner George Akerlof of the University of California - had a vivid analogy for the state of uncertainty the economics profession now faces.

"It's as if a cat has climbed this huge tree - the cat of course is this huge crisis. My view is 'oh my God the cat's going to fall and I don't know what to do'."

Another one of the organisers, David Romer also of the University of California, picked up the analogy: "The cat's been up the tree for five years. It's time to get the cat down from the tree and make sure it doesn't go back up."

The trouble for the economics profession is, according to the last of the conference hosts and another Nobel Prize winner, Joseph Stiglitz: "There is no good economic theory that explains why the cat is still up the tree""

*SLOWCLAP*

http://www.bbc.co.uk/news/business-22223249

Bernanke says "Shoot the cat!"

Tue, 04/23/2013 - 08:09 | 3487380 Temporalist
Temporalist's picture

I think the plan is to either drop bundles of paper from a helicopter onto the cat's head so it "voluntarily" falls out of the tree or to stack paper so high they can climb the tree.  Solution #1 may kill the cat (failure) and solution #2 is a failure because the tree is surrounded by quicksand and they can't stack pallets of paper high or quick enough.

While those are the present "solutions" the ongoing modus operandi is to pile the bodies of debt slaves and serfs so high that the kleptocrats can avoid the quicksand and stand atop the carnage they wrought while they devise more "solutions".

Tue, 04/23/2013 - 08:24 | 3487420 toys for tits
toys for tits's picture

Now their policies are the equivalent of taking axes to the tree to get that god damn cat out.

Tue, 04/23/2013 - 08:32 | 3487445 aka Gil
aka Gil's picture

No worries, cats always manage to get themselves down from trees. You say that cat's been up there 5 years? Oh my...

Tue, 04/23/2013 - 09:00 | 3487568 imaginalis
imaginalis's picture

short cat, long gold

Tue, 04/23/2013 - 10:08 | 3487928 Meat Hammer
Meat Hammer's picture

Shoot the goddamn cat and then go get a dog.

Tue, 04/23/2013 - 10:57 | 3488088 Kirk2NCC1701
Kirk2NCC1701's picture

Using a different analogy then...

I know for fact that you can always get more pussy (cat) if you have more gold.

Tue, 04/23/2013 - 21:19 | 3491143 Hive Raid
Hive Raid's picture

Benjo Shalom says: you can shave a cat's balls many times, but you can only circumsize him once.

 

I thought his beard looked familiar.

Tue, 04/23/2013 - 08:49 | 3487504 TeamDepends
TeamDepends's picture

Here is a better analogy:  A parasite entered the cat and is slowly devouring it from the inside out.

Tue, 04/23/2013 - 08:11 | 3487390 Skin666
Skin666's picture

The trouble for the economics profession is, according to the last of the conference hosts and another Nobel Prize winner, Joseph Stiglitz: "There is no good economic theory that explains why the cat is still up the tree""

Try Ludwig Von Mises's book "The Theory of Money and Credit"

Only been around since 1912!

Logical Positivists are fucking morons!

Tue, 04/23/2013 - 08:21 | 3487414 Skin666
Skin666's picture

"What is needed for a sound expansion of production is additional capital goods, not money or fiduciary media. The credit boom is built on the sands of banknotes and deposits. It must collapse."

"If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders."

"The final outcome of the credit expansion is general impoverishment."

"Credit expansion is the governments foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous."

"What is needed for a sound expansion of production is additional capital goods, not money or fiduciary media. The credit boom is built on the sands of banknotes and deposits. It must collapse."

Human Action by LvM. Published in 1949

 

Tue, 04/23/2013 - 08:53 | 3487518 css1971
css1971's picture

They don't ever dare say the name of the dark lord out loud.

Tue, 04/23/2013 - 08:20 | 3487408 newworldorder
newworldorder's picture

The big economic thinkers still believe in their flawed economic profession. Econcomics has evolved into statisticly driven economic modeling, practices by academics who have not worked in any "wage generating" activity in which labor is converted to capital. They do not have a clue, but have convinced politicians who also have not worked in wage generating activities, that they have all the answers. Perfect marriage of two useless occupations.

That said, economists are not capable of doing true economic analysis. Macro economic analysis is a function of human social behavior. I would be more impressed if this group had also invited the top people in social behavior to this meeting.

They are not trying to fix the system. Rather they are trying to prevent the current finacial system from imploding/exploding. Nothing new will come out of this meeting.

Tue, 04/23/2013 - 11:37 | 3488326 Herd Redirectio...
Herd Redirection Committee's picture

Exactly, they aren't trying to put the house thats on fire out (which is a better analogy), they are trying to keep people calm at the front door, and convince people of the merits of their firefighting effort, while the back door is wide open, and the 'select few' are smash and grabbing everything they can get their hands on.  I mean, just the theft from seniors, by keeping interest rates so low, is of criminal proportions, and yet, most Baby Boomers haven't even caught on yet!  What do they think is going to happen over the next couple years as they try to cash in their stock portfolio?  Up, up, up???

Tue, 04/23/2013 - 09:07 | 3487594 Smiddywesson
Smiddywesson's picture

When you utterly destroy the middle class, nobody cares about your cat.  The rich got theirs, and everybody else can't afford a ladder.

These idiots don't understand the simple fact that people won't spend what they don't have. 

Tue, 04/23/2013 - 14:40 | 3489518 Diogenes
Diogenes's picture

They've been spending what they don't have for years, now their credit is tapped out. That is the problem.

Tue, 04/23/2013 - 07:55 | 3487337 unwashedmass
unwashedmass's picture

the plan backfired. 

instead of fleeing in panic, the peasants bought...and keep buying. 

with leverage at 100:1, you have to be one lucky person to get the one ounce. 

too bad, ben, lloyd, and jamie, the peasants KNOW what you've done, and what a pickle you are in. 

and our hearts fuckin' break for you.

Tue, 04/23/2013 - 08:29 | 3487439 Sean7k
Sean7k's picture

We may not know why, but I would suggest the plan didn't backfire at all. These guys don't do failure. They knew exactly what the response would be. The bigger questions are: how were the measuring the response? and why are they encouraging the concentration of pms in other countries?

The people never win. We need to look harder and smarter. Jesse's Americain cafe has an interesting piece that references Fekete's ideas regarding backwardation and contango that are a good place to start.

Tue, 04/23/2013 - 08:36 | 3487454 unwashedmass
unwashedmass's picture

 

I think you are giving Bernanke and the boyz a lot more credit than they deserve. they are arrogant. they are isolated. they have no contact with the real world. think mitt romney and having no clue -- no connection == to average folks. they believe they are superior.....and that everyone else is stupid and easily led. 

i think they've been stunned by the reaction in the retail markets. if they hadn't been, we would have seen them paper bomb gold down to 1K. silver down to 19. 

Now they've made what was a very bad situation for them exponentially worse. 

now the world is going to see them exposed...if they can't keep a very tight handle on the mainstream media. 

this could result in major calls for breaking up the TBTF banks. 

and.....god help us I never thought this might happen --- if things get very nasty, a takedown of the band of jokers at the CTFC. 

 

Tue, 04/23/2013 - 10:01 | 3487550 Sean7k
Sean7k's picture

In our universe, we parse units of currency in local, regional economies. In their universe, they create waves of value instruments with the purpose of enriching a small segment of the population, over the entire planet. They deal in trillions, not thousands. They live in sterile extravagance, while we aspire to a McMansion. In terms of scale, we have zero ideas regarding their map of the future- except it includes the continued dominion over us all.

I think they have been stunned that more people didn't participate and bring down the LBMA and Comex and are now looking at what price they have to hit to inspire the right amount of panic buying. Panic in China and India? Yes. In America and Europe- merely pressing. The premiums have gone up, but they are manageable and mines are accepting the new price schedules. 

Stock is delayed in silver, but still obtainable, especially from NTR. Gold is very available in most forms with a $55-60 premium. 

Why would they breakup banks? Only if they have something better in store- and not better for us.

Tue, 04/23/2013 - 12:13 | 3488541 Herd Redirectio...
Herd Redirection Committee's picture

Think of this Boston bombing, for eg.  Do you want to concoct a story that will convince/fool the top 5% most intelligent members of society, or do you concoct a story that will convince/fool the other 95% of the population?  Because one story is unlikely to convince both groups.

So transferring the analogy to the gold smash, I think they knew what the reaction would be from 90% of those in the West, and they likely knew what the reaction by the other 10% would be.  So in that sense, they knew what the outcome would be, and it was what they wanted (granny sold her gold earrings), but that doesn't mean they control the entire outcome (Middle East, India, China, and stackers doing what else... Stacking!)

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