Gold At $1,950 Within The Month Reaffirm UBS; JP Morgan $2,500 Year End Call Remains

Tyler Durden's picture

Submitted by GoldCore

Gold at $1,950 Within the Month Reaffirm UBS; JP Morgan $2,500 Year End Call Remains

Gold is higher against most currencies and especially the euro. Gold is trading at USD 1,792.50, EUR 1,245.10, GBP 1,098.30, CHF 1,471.50 and JPY 137,624 per ounce.

Gold’s London AM fix this morning was USD 1,791.00, EUR 1,243.49, GBP 1,097.56 per ounce. Gold fixed marginally higher than last Friday’s AM Fix which was at USD 1,787.00, EUR 1237.10, GBP 1,094.17 per ounce which suggests physical demand is supportive at the $1,800 level.

Cross Currency Table

Asian equities rose again today but China’s stock markets were again lower on concerns about the Chinese and global economy. Initial gains in Europe have turned to weakness but the FTSE is higher as it plays catch up after being closed yesterday.

The mooted German proposal to use periphery nations’ gold reserves as collateral was back on the agenda in Germany yesterday.

The Irish Times reports that in an interview with Der Spiegel in Berlin, influential senior minister Dr. Von der Leyen called for a guarantee system to secure loans issued until the permanent rescue fund ESM, with its inbuilt guarantee mechanisms, comes into effect in 2013. “The task of my generation is to create a united Europe. The problem is that, after the introduction of the euro, we simply stood still,” she said.

“For the labour minister, an ad-hoc collateral system on gold reserves or state assets would discipline national governments and prevent the current bailout regime going the way of the stability pact.”

Fastest Money Supply Growth in 52 Years Supports Gold's Surge 

The United States M2 money supply accelerated 2.2% in July from the prior month, the fastest pace in 52 years, and grew 8.2% yoy, the highest reading in 23 months. The correlation between total U.S. M2 and gold has held above 0.90  since November 2004, as currency debasement creates safe haven buying for the precious metal. 

At the moment Asians seem more worried regarding inflation but this sort of money supply growth is likely to lead to inflation in the U.S and much of the western world. 

Premiums for physical bullion in Asia remain high showing continuing strong demand.

Indian premiums were strong again yesterday as were those in Vietnam and Shanghai.

Reuters reports that Hong Kong dealers quoted premiums for gold bars as high as $1.50 an ounce to spot London prices, from $1.20 last week. Bullion markets were closed in Singapore, Indonesia and Malaysia for the Muslim Eid al-Fitr festival.

Physical dealers in Tokyo saw selling from local investors, but they also noted buying interest from China, where demand for jewelry increases during the mid-autumn festival in September.

Journalist John Brimelow, who publishes the JBGJ, reports in that according to the Shanghai Gold Exchange website a “substantial proportion” of the trade there is for delivery.  “This is not just a paper phenomenon.”

Brimelow said that “bearing in mind the huge gold importing by China in the latter part of last year, in JBGJ’s opinion this is currently the key issue in the gold market.”

The UBS daily note reports that “the mood among gold investors appears to be to buy the dip rather than chase the market, which is understandable given last week's volatility.”

UBS conclude that the “violent sell-off hasn't done any lasting damage to gold, and the reasons investors bought gold in recent months remain valid. Our one-month forecast of $1950 remains in place.” 

UBS three month price view is $2,100 per ounce.

Very significant demand being seen for bullion internationally and especially in Asia means that gold’s correction is likely to again be of short duration. Indeed, the scale of demand suggests that gold may not need a long period of consolidation and could again surprise to the upside.

Non gold experts, many in the financial services industry, continue to warn of a bubble. Their analysis is extremely simplistic and almost exclusively based on recent price action.

However, the majority of those in the industry and the majority of gold market analysts remain bullish.

Throughout August, prior to the recent record nominal high and subsequent selloff, many banks raised their forecasts for the year.

SocGen raised its average gold price forecast to $1,950 an ounce for the fourth quarter of 2011 and to an average of $2,275 per ounce in 2012.

Bank of America-Merrill Lynch said in a research note it was revising its 12-month gold target to $2,000 an ounce.

JPMorgan said that gold could reach over $2,500 per ounce prior to year end.

The recent sell off has not seen banks and analysts revise down their price forecasts. 

GoldCore has said since 2003 that the real high of $2,500 per ounce (inflation adjusted and based on CPI) would likely have to be reached prior to gold being a bubble.

Those informed about the gold market know that absolutely nothing has changed about the supply and demand dynamics driving the gold market.

For the latest news and commentary on financial markets and gold please follow us on Twitter.


Silver is trading at $40.90/oz, €28.38/oz and £25.05/oz. 

Platinum is trading at $1,829.50/oz, palladium at $762/oz and rhodium at $1,800/oz. 


(Wall Street Journal)
Gold buoyed by uncertainty ahead of Fed minutes

Gold inches up after 2-percent fall‎

(San Francisco Chronicle)
Gold Rebounds as Steep Declines Seen as Excessive Amid Debt Woes

Gold Sales in India May Increase 25% During Festival Season, Jeweler Says

India gold seen gaining on bargain buying

Gold 2011 - Special Report - Asian Consumers Driving Demand For Gold

(Resource Investor)
Gold, Politics, and Venezuela

The Many Collapses of Keynesianism

Compare And Contrast To The Great Depression: In Three Parts

(The Guardian)
Currency war feared if nations move to defend industry

(King World News)
Embry - Incredible Physical Gold Demand, Premiums Exploding

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Sudden Debt's picture

They'll do whatever they can to prevent that from happening and make sure the longs will be bleeding.

I think we'll have to wait untill january before we see big jumps up. After the options of 2011....


Snidley Whipsnae's picture

Anyone here believe that Ben is going to stop printing?...

"In the absence of the gold standard, there is no way to protect savings from confiscation by inflation, there is no safe store of value" Alan Greenspan

What else need we know?

Sean7k's picture

Can't be said enough Snidley. Expansion of the money supply in excess of the production of goods and services debases the currency. All commodities will continue to rise. 

Snidley Whipsnae's picture

The enormous cloud of paper hovering over the tiny amount of physical gold is proof enough that gold will continue to rise...

While more paper is printed in huge quantities, a little bit of gold trickles in from mining operations.

Too much paper chasing too little gold = ?

Bicycle Repairman's picture

"What else need we know?"

I'd like to know when TPTB are long gold.  It could be now.

GoldBricker's picture

They're long physical, short paper.

Paper is the cape, physical is the matador. You are the bull; gore that SOB!

MassDecep's picture

I tend to believe they want a controlled increase in PM's. Not skyrocketed, but controlled. They own to much to allow failure.

The clincher could be, as far fetch as it sounds, PM confiscation. Hopefully not, but where is hope and change getting us now? Anything is possible...

Bicycle Repairman's picture

"PM confiscation."

The IRS already plans on confiscating 30% through taxes, so a plan is in place.  As for outright seizure, they will concentrate on large stacks like those controlled by the oil producing countries.  Where's Libya's gold?  Is Chavez going to get his gold back?

Sean7k's picture

PM confiscation didn't work in 1933. Gresham's law- good money goes to ground. It won't work now either. Gold and silver are largely untraceable. As for the IRS- you can't tax what you can't find. Gold and silver will be traded- not sold. When governments become too authoritarian, the rule of law fails.

MassDecep's picture

I do not think they would confiscate for monetary purposes. As you alluded to Sean, we are entering into an authoritarian state where we, or the Global sheeple to be more precise, may not be allowed to own PM's, guns etc.

I know, sounds crazy....., but what is sane nowadays? I talked to a fellow engineer the other day and spoke about QE3. The 55 year old "smart" Engineer, did not have a clue that the Fed was monetizing the debt, bailing out banks, and supporting their illuminati masters. This is one example of the majority of clueless sheeple. The "Authoritarian's can do anything at this point, and they know it.


moondog's picture

The denial of the facts is what bothers me the most. Very educated people are presented with overwhelming evidence of the fraud being committed by the financial and political establishment. Once they digest the details, they either dismiss it or cherry pick the issues they choose to be upset about. The normalcy bias wins again.

IBelieveInMagic's picture

Yes, got to keep them holding paper (they are generously allowed to hold a variety of paper $, Euro, Y, US Treas, Eurobond. But, Gold is a no-no and will be considered a provocation and threat to national security). Bye bye Libya, Egypt, etc.

HelluvaEngineer's picture

If they keep ramping the market every day $2500 in the next month is possible.

Cdad's picture

Cdad sees blatant front running in the US market for gold this good luck with that.  

The problem I have with gold now is that the TBTF banks are involved...which should make all of you gold guys very, very nervous.

Snidley Whipsnae's picture

Yeah, I'm scared of a bunch of bankrupt banks. lol

Demand for physical gold from SE Asia, India, the Mid East and parts of Europe is in the process of blowing up the paper gold markets.

Ben is going to continue to print fiat... The 'big banks' will continue to fight a delaying action against gold rising in fiat. But rise it will...

Cdad's picture

JP Morgan is now your declared ally.  Later, when the price of gold falls at this morning's gain rate x2, THEY will call it volatility.  And at that time, I suspect you will be calling foul and writing treatises on the manipulated price of gold.

As for Bernanke, he just denied the opportunity to print now you must add wishful thinking to your previously mentioned toxic partnership.

I assure you that a slow, steady rise would have been better for your gold position.  



YHC-FTSE's picture

False argument. JPM, GS, MS - they have no allies. They are cuthroat banks out for whatever they can get. 


What is more likely is that these "geniuses" who had hitherto only bought and sold derivatives on conceptual ideas wrapped in bullshit, have finally caught up with the global public sentiment on a "barbarous relic", and now they want a piece of it. It will be very hard for the banks to print gold as they do with fiat if everyone demands physical delivery. But of course the danger for fraud is always present when it involves the banks.


But I agree with your premise that a slow steady rise would be much better. 

Cdad's picture

JPM, GS, MS - they have no allies.

You don't actually believe this, do you?  How about the Fed?  Quite an ally, wouldn't you say?


YHC-FTSE's picture

Yes alright, granted. Although I don't really make a distinction between the (private) federal reserve (bank) and the squids, considering the same actors can be found revolving around the same doors in these institutions. They're all alumnis of each other aren't they? 

Snidley Whipsnae's picture

My friend is not the Fed, not JPM or HSBC, but billions of Asians, Indians and Mid Easterners buying physical gold.

I could give a rats ass what JPM/HSBC predict! They are only making predictions to give the appearance that they still are 'all knowing seers' and by extension have some control over the PMs mkts.

Their days of control are numbered and the number is dimishing.

Bokkenrijder's picture

Hmmm, these kind of 'predictions' always remind me of 2008 and $200 oil...

RTFM's picture

Yep. Those who listened to the gold pumpers and bought into that ramp in 2008 got CREAMED by the BUSINESS END of a STALLION APPENDAGE.

If you think it can't happen again, let me tell you: IT CAN. And probably will.

These gold pumpers should be thrown into ASS-pounding prison along with them folk who refuse to pay to educate their kid, and send them to a public school.

Thank Chango for folks like Prechter, Karl 'Morpheus' Denninger and Daneric who bring much needed sanity to this world. I will laugh like a drain when gold fails to hit 3000 dollars an ounce this year and PROVE KARL correct - AGAIN!

"I'm made as hell and I ain't gonna take it any more!!!!"


Snidley Whipsnae's picture

The forces driving gold, the fundamentals, have not changed. What would it take to change them, worlwide?

A stronger dollar? Does anyone believe that Ben is going to hike interest rates and strengthen the dollar? Does anyone know what would happen to the US and world economies if Ben hikes interest rates now?

Karl is a day trader cum wannabe economist, keep reading Karl and following his advice and you can spend the remainder of your existence under a bridge.


RTFM's picture

Ben doesn't control interest rates - the market does.

Interest rates are low because we are in a deflationary depression.

In a deflationary depression, the dollar rises, and Gold, Silver and crAAPLe fall.

Ergo, the price of Gold, Silver and crAAPLe must be falling, even as we speak. Ignore your lying eyes, and follow the Math. Which never lies.

If you are not intelligent enough to understand this bullet-proof logic, you must not visit the Ticker forum, as it requires an IQ in the high double-digits.

Snidley Whipsnae's picture

"Ben doesn't control interest rates - the market does."

Wake up and smell the roses... Ben IS THE MARKET!

Did you miss QE1,2, and now the enormous T purchases by the Fed? Zero interest rates announcement by Ben for the next 2 years? are you living in a cave?

and yes RTFM, Ben is controlling interest rates... Until this scam blows sky high...

Karl has done a number on your head...

RTFM's picture

oh, horseshit, Snid.

are you saying Karl Denninger is wrong? WTF? He is a world class expert on markets, computers, nuclear reactors and scuba diving!

Sean7k's picture

You obviously have no understanding of economics or montary theory. The movement in gold prices is consistent with the creation of M2 and credit over the last ten years. Listening to predictions is for the ignorant. If M3 stops and production rises- I sell my gold- it is that simple.

cowdiddly's picture

When I turn on the Television and see a show called "Flip that Coin", I will know its time to sell.

Bicycle Repairman's picture

Oil and gold are different.  Do you know the difference?

Ruffcut's picture

It is bit of a bubble, based on demand fervor.

But it is certainly bubbling.

HelluvaEngineer's picture

Sorry but bullshit.  CMG is a bubble.

Snidley Whipsnae's picture

Demand fervor? Yes, the demand fervor is coming from the East and it isn't showing any sign of letting up... In fact, it's accelerating...

“Gold, unlike all other commodities, is a currency,” he told attendees at a conference in Washington D.C. on August 23, saying he did not think the precious metal was in a bubble despite recently reaching a new record above $1900. And a flight to safety amid inflation fears is what’s causing soaring gold prices."

Alan Greenspan...

"Gold Sales in India May Increase 25% During Festival Season, Jeweler Says"


Oh regional Indian's picture

A coupel of things to note about the Indian demand story. Forst off, yes, marriage season, a festival of lights called Diwali, another festival that is literally about "wealth" accumulation, all of these are big gold buying times.

But the real story in India might be silver. As the precious (Au) gets really expensive, I've seen many first time silver investors at the place I buy (major outlet in bangalore). And they are investors because they are buying bars. A half kg. bar is the standard bullion bar sold here. It's all over the news here. So it might be that traditionally India has driven th egold market, this time I think we'll see it give the silver bull a little smack on the behind.


Bicycle Repairman's picture

Both silver and gold are money.  Gold is the senior currency.  You won't go wrong with either.

fiddler_on_the_roof's picture

The real buyers are not your city buyers buying bars. They are still the poor farmers buying Gold at the end of harvest, buying when a girls child is born, buying for each ceremony....

Any one who listened to your Silver story and sold their Gold and bought silver based on your advice last May 2011, they lost a ton. keep your silver to yourself.

silver is not associated with wealth in India. They are secondary to Gold by a wide margin, maybe it will have a pump and dump next year.

Ramadan coming up Aug 1. Muslim folks will also join. How much do muslim's like silver - Not much, I think..

Yellow Tang's picture

Where's my correction to $1650 bitchez?

MarketTruth's picture

Somewhere over the rainbow, Dorothy.

augie's picture

yellow brick road is such a misleading term.... 

RTFM's picture

1650? As the 'Sage of Niceville' so rightly points out, Gold is not worth buying higher than $200!

ItchiBitzchi's picture

JP morgan wants to draw a line in the sand, but they will soon realize that that line will be crushed and surpassed way above their wall of worry. I wonder what will happen to the comex, whose blatant manipulation of the commodities market has reigned supreme for a long time? What will happen when the sheep wake up?

LoneStarHog's picture

What will happen when the sheep realize that they own nothing but paper and/or paper promises and physical is screaming higher and higher?  What will happen when all the paper promises can't deliver physical silver? I would be very, very worried if I were one of these scam artists (Jamie Dimon, Blythe Masters, Kitco, SLV, etc, etc, etc.).  The day is coming...and...FAST!

LoneStarHog's picture < The fallacy in this poll is that it does not ask HOW these Americans HOLD their gold.  I will venture to say that the majority hold it in places like GLD, unallocated accounts, etc.  No other words:  PAPER!

Snidley Whipsnae's picture

"I will venture to say that the majority hold it in places like GLD, unallocated accounts, etc. No other words: PAPER!"

You are not looking at the big picture and the big picture is that gold prices are being driven higher by physical purchases in the East.

Typical Amerocentric comment. Open your eyes... there is a wide world out there and the US is not the dynamo driving PM prices.

The US/London still are hanging onto control of gold prices through the LBMA/Comex paper manipulations, but how much longer can that last if soverigns demand their gold in storage be delivered to their home countries? Hugo went first... who next? How long till a fail to deliver? How much gold will central banks give up to bail their bullion banks that cannot deliver physical?

It's the paper pushers that are worried, not those holding physical.

LoneStarHog's picture

The topic was AMERICANS and gold.  Are you capable of READING and COMPREHENDING?  I am well aware of where strong PHYSICAL DEMAND is emanating.  Everything I posted was TRASHING paper and TOUTING physical.  R_E_A_D !!!!!

Snidley Whipsnae's picture

"The topic was AMERICANS and gold."

I am not concerned with the small amount of physical PMs being purchased by the West... The action is in the East!

Why are you so anxious to have the conversation limited to the West?

Scared that readers might find out what is happening in the East?

Hey, there is no, or very little, censorship here. I vote that the site remain free of censorship... If you want a limited conversation; ie, censorship, there are millions of shill controled sites that offer that option.



LoneStarHog's picture

I was commenting on the POLL...Do you understand that it is NOT a poll that I conducted...Censorship and all the rest of your ramblings?...Are you on friggin' DRUGS?

Bicycle Repairman's picture

"if sovereigns demand their gold in storage be delivered to their home countries? Hugo went first... who next? How long till a fail to deliver?"

This may pose a problem, but I expect that gold will not be delivered to "terrorist states".  In the meantime large stacks of gold that is stored outside of the "system" will be vacuumed up.

Snidley Whipsnae's picture

"terrorist state" You make me sick... This failing empire will rue the day it declared for emperialism. You enjoy getting patted down before getting on a commercial flight?

The Patriot Act... probably your bible, eh?