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Citi Predicts Gold At $3400 In "The Next Two Years", Potential For Move As High As $6000
Following today's margin call anticipating, liquidation-driven rout in gold, the weak hands are, as the saying goes, puking up blood. Which may not be a bad thing - after all, sometimes a catharsis is needed to get people away from potentially toxic paper exposure which very likely has been hypothecated repeatedly via the same channels we discussed last week when exposing the MF Global-HSBC "commingled gold" lawsuit. But what about the future? Well, nobody can ever predict it, but at least we can sometimes look at charts in an attempt to glean a pattern. Which is why we present the just released slide deck from Citi's FX Technicals group titled "The 12 Chart of Christmas" which has some blockbuster predictions about the coming year, chief among them is without doubt the firm's outlook on gold which they see at $2400 in the second half of 2012, and moving "toward $3400 over the next 2 years or so." So for those looking at today's price action, consider it an opportunity to roll out of paper exposure and into gold, because the more deflationary the environment gets, the more eager the central planning cabal will be to add a zero (which in our day and age of primarily electronic money can be done with the flip of a switch) to the end of every worthless piece of monetary equivalent paper in circulation. And that's a 100% certainty.
From Citi:
While we remain cautious on Gold in the near term and believe that we could correct lower towards $1,600 and possibly re-test the $1,550 area we continue to believe that the bull market remains intact. As with the Equity market we believe that 2012 may be reminiscent of 1978 when Gold rallied nearly 50% off the 1977 close. Such a move would likely put Gold in the $2,300-2,400 area in the 2nd half of 2012.
On a longer term basis we expect even higher levels and target a move towards $3,400 over the next 2 years or so. We are not yet on board with the idea of a move with the same magnitude as seen in 1970-1980 when the last spike in Dec 1979-Jan 1980 saw Gold almost double in price as Russia invaded Afghanistan. Such a dynamic would suggest a move above $6,000 but we prefer to take a more conservative stance and look for a move similar to that seen without that final event driven push at the high which was a “blowout top” in Jan. 1980.
Many more charts coming shortly....
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Meanwhile the price of U.S. govt. debt is 2% off a 100-year high and Uncle Sam´s deficits are being happily funded. Thus no need for QE3 in the foreseeable future.
The market has obviously been piling into cash in anticipation of falling prices and this is likely to continue for years. The commodities market is broken, warehousing scams are crumbling. Most of the complex is probably heading to lows of 3-5 years ago.
The FED can´t really do a thing anyway since it´s leveraged to the hilt as it is. And BTW, the notion that the FED is privately owned is in effect just a myth. It hands almost all of its profits over to the Treasury and according to U.S. Code should the Federal Reserve system go into liquidation or be disenfranchised what remains after payment of debt, dividend requirements etc., will be transferred to and become the property of the United States government. The stock included. So, for all practical purposes the FED is a govt. institution.
"So, for all practical purposes the FED is a govt. institution"
The Fed can hand out trillions in dollars to US and foreign institutions without any government regulation or scrutiny or even an audit. Any profit it makes for the Treasury may be a fraction of the profit it allowed the private banks to make.
Under these conditions, we cannot call it a Govt. Institution. The primary beneficiaries of the Fed are probably private banks under the cloak of callling the institution "Federal." Since it is exempt from most federal regulations, it is less federal than Federal Express.
when you're joyriding in a stolen car, grinding the gears, sideswiping other cars, while you're speeding towards the inevitable collision, do you really give a shit who's name is on the registration? or that their insurance will have to pay for all the damage?
.
Full Retard.
Citi should be buying gold hand over fist if they believe this right?!?! And GS' predictions are higher than here too right they should also be buying...and all the other banks that have forecast higher prices. What big bank doesn't have a price target for gold higher I'd like to know as they all seem to which means they have to buy right? Which means mining stocks will do better too right? For some reason I think the whole sector is still being ignored and poopoohed for nefarious reasons.
All of the analysts that are just under or at this POG are now going to claim vindication from this level if it remains to year end. This is why it's happening; so bear mouthpieces can gain some credibility for the future and claim "see I was right" BS.
If gold had done just the opposite of what it has just undone the story would have been "Oh, snore, gold went over $2000. And in other news, global collapse."
Called it Bitzhez!!
The true question you have to contemplate is.. will TPTB ultimately release true power to the people in light of all our Liberties disappearing? Just think about that for a while, then make your decision.
I hold physical, just bought a 2012 Harley when Silver hit $32.xx oz cashed in 16k cause I want to enjoy my life for a while before the Revolution.
Technical my ass, let's see Citi's money where it's mouth is.
The trolls come out when shiny, real things are discussed.
so do seagulls.
Antidisrehypothecatedestablishmentarianism = gold bug?
do I have that correct?
I like it.
If being anti-Wall Street parasitic leverage makes me a gold bug, than I vote gold (and silver).
Gainesville Coin's site was lagging this morning... picked up a little Au & Ag. Made a buy in the morning when Au was down $55, then went back in when it was down $85. I will be buying small amounts of PM until the day I die, hope you all do the same. RON PAUL 2012
I would like to buy some pre-rehypothecated gold. Does anyone know where I can do so or should just assume it's a done deal?
5 years ago, the currency in circulation stacked up next to the above ground supply of physical gold was $3500/Oz.Something has to snap.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
what's with the bold text on every post and the mega font on your blog?
is your prescription out of date?
hoping someone will respond... i called a local coin shop asking for price of 1 oz can maple leaves. They're selling it for $35 over spot. another shop in adjacent town is selling for $150 above spot. $35 sounds too low.. could it be salted yello Titanium? why whould the range be so wide between shops?
Try APMEX.
Dealers are asking for whatever they think they can get over spot.
Also, coin value depends on condition, circulated or not, proof or not, etc.
If it were me I would ask the shop that was a lot higher why.
I would also suggest Kitco right now. I typically go to APMEX myself, but Kitco has holiday sale on Krugerands (but even "on sale," Kitco is charging about $50 over spot).
I found two great sites that compare the live prices of the biggest dealers, These should help. Saved me some money on my last buy!
Comparesilverprices.com
comparegoldprices.com
Hope these help.
tulving
only problem: minimum order size is 20, and sold out.
I went shopping.
Got a 1 oz. Austrian Philharmonic at August prices.
Sweet.
i can see it.
a year of consolidation....break out in a year....ramp the next.
gotta push it out though.
i think Martin Armstrong has 1620 for a yearly close, though....if we can hold that. It could double from there in 2 years.
When the Citi predicts it's own demise, I will start believing it's predictions
If rehypothecated and paper notes have over extended investments by trillions of dollars meaning that just about everything has been overinflated, who will have the money to drive gold prices up so high?
Afterall, are not the large financiars, insitutions, Large hedge funds, etc the ones who have the largest bets and as such have the most amount artficial wealth to lose? Meaning that they too will lose or have already lost everything.
Large assets have to be protected, but will they make cash returns? Can you get returns paid in gold? No, you have to sell the gold inorder to get the cash. But who will have the cash? Pysical Cash is really the key especially if people cannot produce it.
If the masses can not get money including Gold, then what use is it? You can go to the store but what would you buy (assuming you did not get mugged along the way)? The store would not be able to collect cash in order to pay it's bills so their goes the distribution chain. This is just another excuse for more QE but it isn't working.
If anything, I would think that physical dollars would be king. Afterall, with less of them, they would streangthen against everything, including gold under such cicumstances, would it not? Unless the government decides to allow gold and silver to be used as money, there is not much use for it other than speculation. ANd if the governmend did collapse, well what would you spend it on? Now, if everyone had a lot of cash and was buying gold this would be a different matter entirely.
It great to have gold as a speculation but you must still convert that gold into currency which defeats the motive of the rise behind it. And it does not mean you can't profit from its speculation. However, you must realize that you will be paid in cash or receive cash for exchanges or purchases, will you not?
Retail gold and silver buying must be going gangbusters as over spot margins have done nothing but go up since yesterday.