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Goldman Is Getting Nervous: "There Are Significant Risks To Our Forecast For Gold Price Weakness"
When it comes to assets, economists, Wall Street, and central planners love them all... except one: gold. Forget about Bernanke's hilarious sworn testimony that gold has "value only due to tradition", and recall Mario Draghi's QE announcement in December 2014 when asked what sorts of assets should be included in QE, his response: "we discussed all assets BUT gold."
Well of course the ECB will never buy gold - by its very nature, the precious metal stands for everything the legacy insolvent regime patched together with the superglue of money printing central-bankers, hates: prudent use of money and leverage, living within one's means, and most importantly, saving not spending. Gold applied to the current regime where the world is drowning in about 3.5 times more debt than GDP would mean wiping out trillions in equity value that should not exist.
It also makes impossible such monstrous abortions as $1 quadrillion in global derivatives which, like a house of cards, is only as strong as the weakest counterparty, and is why central banks around the globe have gone all in on the Greenspan/Bernanke/Yellen/Draghi put, and will never allow another major bank to fail again.
Ironically, while the "very serious", if laughable and totally discredited people, take every opportunity to bash gold, they are quietly buying up all the physical gold they can find, whether it is in London (where the local vaults are practically empty), or in Beijing or Bombay, which are the largest natural sources of demand for physical gold.
Lately these same "serious" people are starting to get nervous, because while most other "commodities" have seen their prices plummet in the biggest crash since Lehman, gold just went green for the year. And the last thing the financial system, already teetering on the edge of global recession, can handle is another massive momentum wave out of "intangible" assets and into very real gold, like what happened in 2010 and 2011 before the BIS ended gold's meteoric rise in September 2011.
Enter Goldman, which moments ago admitted that while its "base case is still for higher US real interest rates, lower gold", it may be wrong adding that "while our base case remains for higher US real rates and lower gold prices, there are significant risks that our forecast for gold price weakness is pushed out, should the Fed surprise us and remain on hold in December."
From Goldman's Max Layton
Gold has rallied by almost 8% since its July lows, leaving the price flat over the 2015 calendar year to date, which represents substantial outperformance relative to most other commodity prices (see chart below). Indeed, prices are near our forecast as we expected only a gradual decline in prices in 2015 (please see Central banks stall a more bearish gold outlook, published January 25, 2015).
The rebound in the gold price was associated with a strong pickup in comex net speculative positioning (Exhibit 7). In July, August and early September, the net speculative long position build was associated with short covering of comex speculative positions, but more recently the rise in net speculative positioning has been associated with both new gold long positions and further short covering (Exhibit 8).
Actually, no. The biggest reason for the recent surge in gold is a direct consequence of the Fed losing credibility, and confirming yet again that the market calls all the shots, even it means debasing the dollar and sacrificing the reserve currency. In other words, it means that the more Yellen avoids renormalizing monetary policy - and since she is trapped, even the most modest rate hike will lead to an immediate rate cut and/or QE, just like in the Japan experience from August 2000, the higher gold will rise.
Goldman admits as much:
Looking ahead, our economists continue to expect a 25 basis point rate hike at the December FOMC meeting, and for a further 100 basis points of rate increases during 2016. The Fed leadership has signaled that such a move is likely if the economy and markets evolve broadly as expected, and our economists’ forecast is similar to theirs. However, they are only about 60% confident. Most of the uncertainty relates to the possibility that the economic and market environment – or in a broad sense, “the data” – will be worse than the FOMC’s (and our) expectations.
The low market-implied probability of a December hike of only 30%-40% probably reflects a mixture of concerns about the data (which we find reasonable) and a belief among some market participants that the FOMC will find an “excuse” to stay on hold even if the economy does fine (which we find unreasonable). The low market-implied probability is not a problem now, but Fed officials will need to find a way to move it much higher by the time of the meeting if they really do want to hike.
The Fed’s rationale for wanting to start the normalization process is straightforward. In their view, labor market slack has diminished substantially, the link between slack and inflation is stronger than widely believed, and the funds rate is far below the longer-term equilibrium rate, so they need to get started well before the economy is back to normal.
Goldman also finally admits that 7 years after it started, central-planning is not going quite as planned, with the biggest "risk" being another major move higher in the price of gold:
While our base case remains for higher US real rates and lower gold prices, there are significant risks that our forecast for gold price weakness is pushed out, should the Fed surprise us and remain on hold in December.
So in light of all this information, what does the TBTF hedge fund with the FDIC backstop want you to do? Why sell it to Goldman of course!
Indeed, notwithstanding the fact that the “new normal” equilibrium in interest rates remains uncertain, a plausible range of scenarios all imply lower gold prices. Overall, our forecasts are unchanged, however we roll our forecasts along the existing price forecast path, such that our 3/6/12-month forecasts are $1,100/oz, $1,050/oz, and $1,000/oz, respectively.
Right - so Goldman, which has been almost as wrong about its "economic recovery" forecasts as the Fed, not only is confident that "this time" it will get it right, but that gold will plunge even though in the sentence right before it the central banker-spawning hedge fund admits there as "significant risks" that its gold forecast will be "pushed out"... which is economist talk for "wrong."
And just in case Goldman is wrong, it would love to rid you of any barbaric relic you may currently have. So run, sell it all now, before it plummets to $1,000 or lower in the coming months. You won't even have to look far for a willing seller: Goldman will buy all you have to sell.
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Goldman, an ironic misnomer if ever there was one...
Like I give a shit if they are right, not likely, and it goes down to 1k. What do they want us to do sell and put dollars in a bank? Sell and put the money in manipulted stocks? Sorry, you fags screwed it all up and we aren't stupid. You are not going to get it.
they aren't fags (well, not many). if you want to call them bad names (i do) call them what they are.
"When it comes to assets, economists, Wall Street, and central planners love them all... except one: gold."
I figured Ag would be doing better since they are so wild about it.
Surprised they actually are trying to look credible after they gold bashed while buying physical hand over fist, normally they have no shame.
Still by this metric silver is the only attractive asset at current prices.
Goldman wants all for gold for themselves.....and they don't like paying retail.
Don't keep us in suspense...
OK fine! Damned pedophiles....
Cheese Popes?
viva la francis_sawyer
One thing is certain, they are not hobosexuals.
the jews loves the homo's.........
'Greater MetroWest is joining about 500 communities around the country that have received training in how to make their Jewish institutions “safe and inclusive” for lesbian, gay, bisexual, and transgender Jews.'
http://njjewishnews.com/article/28699/lgbt-training-offered-for-local-in...
" if you want to call them bad names (i do) call them what they are. "
would errh -- psychopaths-- fit the bill??
from Wiki:
Psychopathy (/sa??k?p??i/), also known as—though sometimes distinguished from—sociopathy (/so?si??p??i/), is traditionally defined as a personality disorder characterized by enduring antisocial behavior, diminished empathy and remorse, and disinhibited or bold behavior.
Oh--, it will! So there you go!!
lets face it they are all criminals there at GOLDMAN! I mean, when you get those dummies saying they are DOING GODS WORK!....i mean...haha COMON!
The strong dollar is absolutly hammering GOLD. And the opposed to that, the market traders keep seeing a one scary HALLOWEEN INDICTOR people are not looking at here => http://bit.ly/1jQPB7U
Gold was trading near its lowest in over a week today, hurt by a stronger dollar as said.
Bullion briefly burst through its 200-day moving average around $1,175 per ounce on Wednesday for a sixth straight day. That tells me something is up.
Its failure to hold above long-term resistance undermined sentiment and increased selling pressure. Hmmmmm.
It seems investors keep clamorring somewhere for safety against emerging market currencies and commodity-linked units following a slide in the Chinese stock market we saw recently.
Bullion investors will be keeping a close watch on the currency markets for trading cues. The European Central Bank meets later on Thursday and is likely to stop short of actually taking new policy steps as it awaits fresh indications about the outlook for flagging euro zone inflation.
traders are still hunting for clues about the strength of the economy and how it could impact the Federal Reserve's monetary policy.
Uncertainty over the timing of a looming U.S. rate hike has weighed on the metal for months now.
I mean all this bullshit about the FED RAISING rates, and people creaming in their jeans...about it. And the FED have actually done nothing. Can you see the pattern here sir?? LOL
Real funny, douchebag banker whores. Just keep gold low as long as possible. This, I can appreciate as I continue to stock the f@#$ up. When you are done holding it way down, let it explode. Many thanks, dildos.
The only was the fed can surprise those psychopaths is to act in an honorable, integritous manner. It would surprise the shit out of me too
Give the fags nothing.
I just hope these Klingon cocksuckers from Uranus choke on all of their shorts in metals, and die in a fire of margin calls.
Hasta la vista, dickwads.
Fiatman just doesn't have that ring to it.
Ahaha you Sir made my day!
Gold is no commodity it's money, bitchez! And soon it will be the only (along with l'il bro silver, of course) money worth holding.
Yeah, keep believing that gold has magical powers. You'll have to find out for yourself when Worldwide SHTF, your pet rocks will be worth a fraction of what they're worth today. Joke will be on you.
Of course you won't believe what I'm saying right now. When things turn down worldwide, it becomes a buyer's market for useless commodities. I'll have the last laugh.
Depends on the true nature of the collapse. Initially AU/AG will be not very useful. Cash will remain King for a period. Plastic will be useless right away. Food will rule all along with guns/ammo, water, etc. Agter things settle down from chaos AU/AG will come into favor. Cash will be trash. This has been repeated in many countries time and again. Most really old cultures have assimilated gold into their genetic code.
I generally agree with you.
However, you are confusing a localized collapse, such as Zimbabwe, Argentina, Weirmar, etc, with a worldwide collapse. In a localized collapse, there remains a robust worldwide market. A worldwide collapse, such a a failure of a reserve currency, will take gold down with it and keep it down.
Such an incident already happened on a lesser scale in 2008. The price of gold plummeted. It only rose after that because of massive QE, but then everything rose because of the liquidity injection. By definition, there wouldn't be any injection after a collapse of a reserve currency.
Gold is a luxury purchase during good times. When the worldwide economy collapses, so will demand for luxuries. Gold is one of those luxuries, because it has absolutely no practical uses.
As I said, there are far to many true believes on here that will never accept me challenging their reliegon. It's easy to spot them, they simply attack. They would rather die than change their minds or admit they could be wrong.
When fiat collapses, gold will stop being a luxury and become a necessity. Count on it.
So let me get this right. The economy collapses. Pet rocks lose their value.
You somehow have preserved your buying power. You choose to buy pet rocks.
What the shit Anopheles. Do you want ants? Because that is how you get ants.
the french called the guillotine the National Razor........so yes, Golman Saks should be getting nervous
is that rayciss?
I hope for the day that gold begins it's meteoric rise, not so much because of the financial aspect as what it will mean for the corrupt system. I prefer to think of it as a well placed junk punch landed on the shriveled angry little nads of every member of the predatory banking system.
OT, curious to see what if anything will go down in China tonight after the explosion they had. If these explosions are not caused by their own citizens the Chinese may be getting a tad tired of this BS.
Nothing to sell now, ship wreck Pirate Style.
Gold Bitchez.....I pick up pennies
I like my gold and silver too - it makes me feel like I gave a big FUCK YOU to ponzi banking/hedge fund/Wall Street pukes :)
off topic or on topic.......depending on ur POV.........from new jewsy jewish news.........
Historian: 2016’s is ‘most Jewish’ race Ex-White House staffer tells fed major donors of Jews’ political rise''A presidential historian and former White House staffer told an Aug. 11 gathering in Long Branch that the 2016 presidential race is shaping up to be the “most Jewish” in history.
“Think about it,” said Dr. Tevi Troy. “Both leading candidates, Hillary Clinton and Donald Trump, have machatunim,” Jewish in-laws of their daughters. (Chelsea Clinton is married to the Jewish Marc Mezvinsky, and Trump’s daughter, Ivanka, married the Orthodox Jared Kushner, originally of Livingston, after converting.)''
http://njjewishnews.com/article/28151/historian-2016s-is-most-jewish-race
freaking sons in law?
bernie sanders is a jew with a brooklyn accent. and i like his position on israel better than clinton's or trump's. not great, just better.
Sheldon Adelson Is Ready to Buy the Presidency He just hasn’t decided which Republican candidate to backshel Adelson has been known to boast that he is still “the richest Jew in the world.”
'Among the 17 candidates currently vying for the Republican presidential nomination, most are also competing in the “Adelson primary”: the hotly contested race for the donor’s heart, which runs through Israel.'
http://nymag.com/daily/intelligencer/2015/09/sheldon-adelson-is-ready-to...
lmao!..."we discussed all assets BUT gold." - Mario Draghi
Because national debt backed by constantly devaluing currency & common stawk receipts are assets?
These are surely the smartest people in the room, fo sho ;-)
Yes, the phrase "The lady doth protest too much, methinks" springs to mind!
I don't think real people even speak the same language as central bankers and it's government employees..."No, the horse is not the asset, it's the horseshit it leaves behind that is the real asset!"
Yeah, it's laying all over the place, worldwide, as the horse stands in bemusement as bankers scurry back & forth picking it up...lol.
Not to mention apparently smelly treasuries.
we discussed all assests we plan to plunder with the ponzi US dollar... in the end Goldman will own all real estate, factories, national assets... the great take over
In the end, all Goldman will own is paper. The force it backs those claims with, will be who's? ;-)
but they will hold all the loans... therefore will foreclose on assets...
In the paradigm of THIS law & order regime, yes. But...what if WE were to "change laws" instituded by their lobbyists? As one of my favorite snark sayism's on elitists plots & plans goes..."Why, this changes everything we thought we knew!" ;-)
I mean, If gold hadn`t been disscussed, why would Draghi feel the need to mention gold at all!?
They`re are crapping themselves because a revaluation of gold is the only way out and they don`t have any left!!
Just a matter of time imho.
Goldman has been very successful in the past talking down gold in their forecasts and having the paper price follow through. It may not work this time, they know it, and are setting things up to blame a wrong forecast (and a continued gold bull) squarely on the FED.
A little case of biting the hand that feeds you, no?
But let's say that the smartest people in the room succeed and get gold back below $1100 and silver into a 13 handle by 1Q16. That would pretty much put the final nail in the coffins of Sinclair and Maguire (and some others, BH, as well as all the still-standing cheerleaders). Getting a stronger dollar in gold terms would also shatter Armstrong's model a bit after 2015.75 as confidence in the FED would be a little restored. It would be a great psyops victory for the CBs and put off the next gold bull at least another 2 years IMHO.
On the other hand, the FED "can't possibly" raise rates with US debt where it is and the economy all but depression-bound.
The imovable object and irrestible force are setting up for an interesting quarter. I would love to be smart enough and have enough moxie to put my prediction out there, but all I'll say now is "rah rah gold".
According to the latest IMF
Today its announced Russia buys yet another 34 tons for about 1350 ton total and only 13% of reserves. Well heck if your going to give it away.
http://lawrieongold.com/2015/10/21/russian-central-bank-accumulates-anot...
All while jetting around Syria and oil at 45 and Obola saying they cannot afford to fight this war.. What's that? a trickle of sweat I see coming out from under that red checked Towel Sandman?
obama is pooping his pants so he's eating loperamide like pez.
this guy is so outclassed he has no idea what awaits.
I laughed.
Out loud?
I doubt the Fed ever do anything that would surprise GS.
Fedgold, Goldfed, whatever...
Goldman is the FED. They have alumni scattered to the four corners of the earth. Most central banks in the world have ex-Goldfed people running them.
Goldman isn't nervous. They are the one's who move the price and know exactly when and how low gold is going. I'm waiting patiently for one more manipulated crash to $1000 where I',m moving all in on the metal and gold stocks.
Once you own gold you know what it means to not worry about what will happen to you financially when you least expect it. I lost it all at sea though so now I dabble in mining stocks hoping for an eventual jackpot there but really I don't give a shit.
Gold rises, and falls, directly proportional with the Public Confidence in "leadership"; aka "the elite".
Actually, the Gold Price never varies; all else is now collapsing around it. despite what the Fantasy Charts and Statistics of our Ignoratir Economists would have you believe.
The FedRes is the Banker Cartel that rules the world, for the Bankers. Economists are the "True-Believer" sword weilding Priests that serve the Banking System; they lie.
Look, it is all Collapsing. And? Que? WTF?
It's Not the Economy Stupid, Its The Economists.
http://www.zerohedge.com/news/2015-10-17/dollar-moves-shake-world-federa...
If you are not buying some Gold Bullion hard, you are Insane and delusional: Milage will Vary (but not much). Doomed rings a bell or two.
For whom do the Bells Toll, The Bells toll for Thee.
Ho hum
Of course gold price varies. Gold price denominated in quantity of goods and services it commands goes up and down according to the demand for gold by those holding goods and providing services.
I posit that Gold stays the same and currency value , goods and services available, swirl around it.
The only thing that devalues Gold is making more available.
No matter what, sharpies will want to take it from you, in fair trade or not.
Die Vampire Squid !
( and take the Fed with you )
In a world where prices for just about anything no longer reflect reality, I find it easier to concentrate on two things:
1. The inevitable destruction or severe falls in price of large slabs of so called assets and
2. Certainty and security of cash flow.
You won't even have to look far for a willing seller...
Duh i know the author meant buyer.. but yeah i would bet they are hard pressed to find a seller..
Switzerland exported 1000 tons of gold to Asia this year http://www.ezv.admin.ch/themen/04096/04101/05233/05672/index.html
Russia added 34 tonnes of gold to reserves in September http://www.cbr.ru/Eng/hd_base/Default.aspx?Prtid=mrrf_m
The Federal Reserve Bank of San Francisco published a working paper this month, "Measuring the Natural Rate of Interest Redux," in which it introduced the potential for using both negative short-end rates coupled with another round of quantitative easing (QE) focused at the long end, as a response to the next recession.
http://www.frbsf.org/economic-research/files/wp2015-16.pdf
Thomas Laubach
Board of Governors of the Federal Reserve System
and
John C. Williams
Federal Reserve Bank of San Francisco
October 14, 2015
Abstract
Persistently low real interest rates have prompted the question whether low interest rates are here to stay. This essay assesses the empirical evidence regarding the natural rate of interest in the United States using the Laubach-Williams model. Since the start of the Great Recession, the estimated natural rate of interest fell sharply and shows no sign of recovering. These results are robust to alternative model specifications. If the natural rate remains low, future episodes of hitting the zero lower bound are likely to be frequent and long-lasting. In addition, uncertainty about the natural rate argues for policy approaches that are more robust to mismeasurement of natural rates.
Let the smartest guys in the room talk gold cheap so an ignoramus such as myself can accumulate cheaply
oh yes goldman, because a rate hike to 0.30% is going to push gold down below $1000 as the dollars all rush back into savings accounts for that high yield.
AR15AU - I am predicting if intrest rates increase by 0.3% I would be liquidating some of my gold position to take advantage of all the great deals that will be presented in stocks, bonds, realestate and collectables.
AR15AU - I am predicting if intrest rates increase by 0.3% I would be liquidating some of my gold position to take advantage of all the great deals that will be presented in stocks, bonds, realestate and collectables.
Not necessarily for the savings account yield, for the yield available when invested in something, anything in the economy offering >0 productivity-based return. Gold preserves value well but doesn't increase it. Investing in gold is a strong vote of no-confidence on not just the dollar but also the economy and the Fed's manipulations. If the Fed raises rates it maintains a shred of credibility and keeps the notion alive that maybe the economy really is OK and wealth is better kept in dollars even weakly productively engaged in the economy in stocks, bonds, real estate, or whatnot rather than parked off to the side idle in gold.
I call bullshit Tyler(s).
Gold will likely end the year very badly.
TIC -TOC time is running out... for all the commentary on ZH about gold ownership, how many actually hold physical..action beat analysis everytime..
www.teamramgold.com/about-us
You're dumb as a rock if you think anyone is going to give up "OP-SEC" by answering your question.
Try regular troll questions, you'll be more productive.
Translation:
"There are significant risks to our gold price manipulations"