Citigroup Predict Gold At $2,400/oz In 2012 And $3,400/oz "In Coming Years"

Tyler Durden's picture

From GoldCore

Citigroup Predict Gold At $2,400/oz In 2012 And $3,400/oz "In Coming Years"

Gold’s London AM fix this morning was USD 1,698.00, EUR 1,286.17, and GBP 1,073.60 per ounce.

Friday's AM fix was USD 1,714.50, EUR 1,292.99, and GBP 1,076.14 per ounce.


Cross Currency Table – (Bloomberg) 

Gold fell $3.10 in New York Friday and closed at $1,711.60/oz. Gold fell in Asia prior to modest price falls in Europe which has gold now trading at $1,696.43/oz.

Gold fell by nearly 3.5% last week - the largest one week fall since the week of Dec 18. Gold's intraday and monthly low from the "Leap Year Gold Massacre" is $1,688/oz. Technical damage continues and a breach of this level could see gold quickly fall to support at $1,650/oz.


Gold 1 Year Chart – (Bloomberg)

Gold is being supported by Asian physical demand, which has picked up again and was robust in Asia overnight. Asian jewellery makers are reported to have been using this dip to stock up on gold.

Besides Asian jewellers, many Asian money managers and hedge funds continue to see the value in the yellow metal and buy on price weakness.

Gold is also supported by good retail and institutional demand internationally as seen in the new record ETF gold holdings last week. CFTC data shows that hedge funds, bullion banks and other institutions also remain positive on gold and increased their net long positions last week - rising by 12,259 contracts or 7% from a week earlier.

The EU’s second 3 year funding and a surprise policy easing by the Bank of Japan a few weeks ago has pressured the euro and the yen making gold increasingly attractive to holders of these currencies. Economists believe that the ECB will keep interest rates low at 1% until deep into 2013 on economic concerns and despite high oil prices and the impact of the money that they’ve flooded into the market.

Continuing negative real interest rates and global currency debasement are strong fundamentals leading most analysts to forecast much higher prices. 

Citigroup have said that they believe that gold will rise to $2,400/oz in 2012 and by $3,400/oz in “the coming years”.

However, Citi’s Tom Fitzpatrick warned of price weakness in the short term and said there is a “real danger” that there may be a correction to $1,600/oz which would provide an even better buying opportunity.

Citi are also cautious near term on oil and silver.

Production of gold in Australia slid again last year, despite gold fetching higher nominal prices than ever before.

According to gold experts, Surbiton Associates, 264 tonnes of gold were produced last year, two tonnes less than in 2010.

The 264 tonnes equated to about 8.5 million ounces and ensures that Australia remains a major player in gold, with only China producing more last year. The United States was the world's third-biggest producer with 240 tonnes.

Australia's gold production was well below the nation's production peak in the late 1990s. 

This further suggests the possibility of peak gold production. Of the world’s four biggest gold producers (China, Australia, the U.S. and South Africa), only China has managed to increase gold production in recent years and this Chinese gold is used in China to meet the rapidly growing demand for gold jewellery and coins and bars as stores of value in China.

Thus Chinese gold is not exported into the international market which means that the supply/demand balance in gold is remains tight and the last Wednesday's manipulated sell off provides yet another buying opportunity.

OTHER NEWS
(Reuters Global Gold Forum) -- Morgan Stanley this morning say stay long gold, even after Bernanke's comments last week were interpreted as signalling less chance of QE3. However, we believe that the move last week was profit taking predicated by the news rather than a change in fundamentals. 

The drivers of the long-term uptrend in gold remain intact, most notably negative real rates," MS say. 

According to their "Commodity Thermometer", MS are most bullish on gold and most bearish on zinc, although of the 20 commodities listed, platinum is in 17th place. 

Morgan Stanley say: "We are less bullish on the Platinum Group Metals. Platinum lacks safe haven status and has limited investment demand. With jewelry and the automotive industry as key end markets, slowing global GDP and lower discretionary spending put demand at risk." 

(Bloomberg) -- RBS Says Central Banks Will Buy 300 Tons of Gold This Year 
Central banks will buy 300 metric tons of gold this year, Royal Bank of Scotland Plc said.

China, Russia and India have been the biggest buyers and Switzerland, France and the Netherlands the biggest sellers since the first European central bank gold agreement to limit sales, according to the RBS report e-mailed today.

(Bloomberg) -- Morgan Stanley Says ‘Stay Long Gold’ on Negative Real Rates
Gold will climb mostly because real interest rates are still negative, Morgan Stanley said. There is still a 75 percent chance of another round of quantitative easing in the U.S., Hussein Allidina, an analyst at Morgan Stanley, said in an e-mailed report today.

(Bloomberg) -- China’s January Gold Imports From Hong Kong 33,039 Kilograms 
Hong Kong government announced January gold exports which showed China’s January gold imports from Hong Kong were 33,039 kilograms 

(Bloomberg) -- Gold Traders Increase Bets on Price Rise, CFTC Data Shows 
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended Feb. 28, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 193,220 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 12,259 contracts, or 7 percent, from a week earlier. 

Gold futures fell this week, dropping 3.7 percent to $1,709.80 a troy ounce at today's close. Miners, producers, jewelers and other commercial users were net-short 245,351 contracts, an increase of 16,049 contracts, or 7 percent, from the previous week. 

Each Friday the CFTC publishes aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors, as well as commercial companies that buy or sell futures to protect against price moves. Analysts and investors follow changes in speculators' positions because such transactions can reflect an expectation of a change in prices.

(Bloomberg) -- Silver Traders Increase Bets on Price Rise, CFTC Data Shows
Hedge-fund managers and other large speculators increased their net-long position in New York silver futures in the week ended Feb. 28, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 30,003 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 3,338 contracts, or 13 percent, from a week earlier. 

Silver futures fell this week, dropping 2.5 percent to $34.53 a troy ounce at today's close. Miners, producers, jewelers and other commercial users were net-short 44,593 contracts, an increase of 5,405 contracts, or 14 percent, from the previous week. 

Each Friday the CFTC publishes aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors, as well as commercial companies that buy or sell futures to protect against price moves. Analysts and investors follow changes in speculators' positions because such transactions can reflect an expectation of a change in prices.

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

SILVER 
Silver is trading at $34.22/oz, €25.95/oz and £21.62/oz. 

PLATINUM GROUP METALS 
Platinum is trading at $1,663.50/oz, palladium at $698.00/oz and rhodium at $1,475/oz. 

NEWS
(Reuters)
Gold holds ground at $1710; dollar strength weighs‎

(The Sydney Morning Herald)
Less gold mined last year, but it was worth more

(Market Watch)
Australian gold production little changed in 2011

(Bloomberg)
Buffett’s Immunity to Gold Bug Baffles State Street’s Gold Guy Goolgasian

COMMENTARY
(Reuters)
Gold can scale new peaks without QE springboard

(Mineweb)
Faber Interview: Gold correction may not be over yet, but definitely no gold bubble

(The Street)
Bernanke Bludgeons Bullion: Opinion

(The Financial Times)
Gold flash crash rouses suspicions of witchcraft‎

(Gata)
Pan-Asia Gold Exchange Squashed ... Chinese Silver Exchange Being Created

(Wall Street Journal)
ETFs Hold More Gold Than Italy, France

(Zero Hedge)
David Rosenberg: "The Best Currency May Be Physical Gold"

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trav7777's picture

I predict China's production will continue to rise and rise.  All production targets set by the CCP will always be met.

Hacked Economy's picture

@trav,

Your (yawn!) posts are all over ZH...on practically every column...for weeks.  What, you don't have a job?

Theta_Burn's picture

There appears to be selling

battle axe's picture

War + screwed economy = GOLD

Blackfox's picture

Hold.Buy more.

Zgangsta's picture

Buy high, sell low!

Wait a minute...strike that...reverse it.

Ghordius's picture

now you've done it and I'm confused

McNoob's picture

Zgangsta made reference to the film version of "Willy Wonka and the Chocolate Factory", hence the "Willy" remark.

 

Coincidentally, Charlie Bucket got into the factory with a "Golden Ticket".

SeverinSlade's picture

But but investing in Bank of America aka "America's bank" is a much better investment...uncle Warren told me so!

achmachat's picture

little trivia: Bank of America used to be called Bank of Italy

xela2200's picture

And TD stands for Toronto Dominion.

resurger's picture

"only 5% of investors have gold" M.Faber

Krugman would be sad by this news.. on another note, the AAA for the treasuries pushed gold to $2,400, what happenes when the rating drops to AA!

 

Comay Mierda's picture

fuck thats the last thing i want to hear.  i guess gold will be coming down for a while

francis_sawyer's picture

They're still pricing gold in dollars?

tarsubil's picture

Yeap. You can still buy stuff of value with dollars. It really is amazing and probably won't last much longer. Best bet is to go ahead and buy stuff.

Gringo Viejo's picture

Fuckin' humps. They'd have to stand on their mothers' shoulders just to kiss Richard Russell's ass.

johnnymustardseed's picture

Apparently they don't know about JPM and Blythe.

SILVER_GIRL's picture

Anybody wants to be my friend? :)

Vincent Vega's picture

Golly jeepers what a ballsey call..."gold could correct to $1,600". In this FUBAR market that could happen in the span of 15 minutes.

twotraps's picture

exactly. we live in a flash-crash world....1000 dollars higher in gold can unfold very quickly depending in the situation.  Why people still listen to brokerage firms research is beyond me, only thing funnier is them upgrading and downgrading eachother!  Like anyone on the planet actually knows what they have on their books to properly vaule any of them.

SILVER_GIRL's picture

I am a single woman looking for inteligent and handsome man ...

Gold Dog's picture

Will you settle for none out of two?

resurger's picture

i have lot of Fiat $$$$ would that work for you?

tarsubil's picture

Are you good with children? Do you like cleaning? Are you interested in livng in America in a nice house? I'm looking for a maid/nanny.

Harbanger's picture

I'm good with all that.  And I'll even grow your food and remodel your house.  Is your wife friendly?

SILVER_GIRL's picture

yes i am... but i am portuguese woman :)

tarsubil's picture

What are your measurements?

connda's picture

Will you love me no shit?

Moneyswirth's picture

Is your name Sandra Fluke by any chance?

Harbanger's picture

An American feminist activist that needs free brth/contrl is a fluke.

Sudden Debt's picture

Thank god to paper promises that there will never be physical shortages....

 

Gold Dog's picture

I have a bid in for 2,000 metric tonnes at 1,600 US.

Now all I need is a 0% loan!

Dog

bernorange's picture

Gold production (at least for the portion available to the world outside of China) is falling. 

Sounds bearish.  Must be time to sell. /sarc

www.pmbug.com

Silver Exterior's picture

Up, up and away. All gold bugs 2 the frontline.

debtor of last resort's picture

They will try everything to prevent gold $5000,- in 2013. Even this.

Good sign, they cannot bash it anymore, so they will smoothen things.