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Goldman Sees “Currency of Last Resort” Up 15% At $1,840/oz In 6 Months
From GoldCore
Goldman Sees “Currency of Last Resort” Up 15% At $1,840/oz in 6 Months
Gold’s London AM fix this morning was USD 1,590.00, EUR 1,228.37, and GBP 987.39 per ounce. Yesterday's AM fix was USD 1,585.50, EUR 1,221.87 and GBP 984.17 per ounce.
Silver is trading at $29.13/oz, €22.60/oz and £18.15/oz. Platinum is trading at $1,492.73/oz, palladium at $612.20/oz and rhodium at $1,300/oz.
Gold fell $15.80 or 0.98% in New York yesterday and closed at $1,591.00/oz. Gold ticked higher in Asia but has drifted lower since Europe opened. Support is at yesterday’s intraday low of $1,580/oz.
Cross Currency Table – (Bloomberg)
Gold is relatively unchanged after 3 days of gradual losses despite the degeneration in the Eurozone crisis with the deteriorating situation in Greece and Spain increasing the risk of contagion.
The continuous short term panaceas of recent months look set create an even bigger crisis – which will benefit gold in the medium term.
Spain’s banking troubles could create the next political and economic crisis in Europe. Spanish yields remain near 5 months high (10 year at 6.07%) after Madrid took over the country's 4th biggest bank Bankia in an effort to clean up its banking sector.
Greece’s political turmoil threatens their solvency and risks an exit from the euro currency just months after Athens secured the latest round of ‘bailouts’ from international lenders.
While gold may go lower in the short term, it looks oversold. The Relative Strength Index (RSI) on gold is just above 30 which shows that gold is oversold.
Demand in the west remains muted with little physical coin and bar demand and ETF positions remaining largely flat - the total gold ETF holdings are down -0.12 million ounces, month to date.
When gold experienced its ‘Bernanke fall’ of $80 on February 29, spec length was just above 27 million ounces. Today the gold market longs are nearly 10 million ounces lower suggesting that the worst of the sell off may be over.
The positive action of the gold miners yesterday may also be indicative of a bottom – as the XAU and HUI were up 1.72% and 1.86% respectively.
Physical demand in Asia has picked up again with UBS reporting that demand from India was “again nearly twice average daily volumes”. Jewellers in India appear to be starting to rebuild inventories after the removal of the excise tax.
The Shanghai Futures Exchange launched silver futures trading earlier today. It generated a buzz and “massive interest” amongst Chinese investors according to Reuters. Prices fell in line with international markets.
The total trading volume on the eight contracts <0#SAG:> exceeded 300,000 lots. Thus, the one day old silver contract is now already the second most active contract on the Shanghai exchange after copper.
This bodes well for silver prices in the coming months and in time the silver futures market on the Shanghai exchange will likely rival that of COMEX with ramifications for the silver price.
Goldman Sees “Currency of Last Resort” Up 15 pc At $1,840/oz in 6 Months
Goldman Sachs has confirmed that it remains bullish on gold and believes that gold will rally as the Euro crisis deepens and the US engages in more stimulus.
Gold 1 Year Chart – (Bloomberg)
Goldman maintains “constructive” 6-month forecast, says case for higher prices remains in place.
Goldman stands by its forecast for a rally in gold this year, saying that the precious metal will advance to $1,840/oz over six months as the U.S. central bank embarks on a third round of stimulus in June.
The precious metal remains the “currency of last resort,” according to analysts led by Jeffrey Currie in a report released yesterday.
Goldman’s gold forecast implies a 15% return in 6 months.
“In early 2009, we suggested that gold had become the currency of last resort, overtaking the U.S. dollar’s status due the rising risk of sovereign default and debasement concerns,” Currie wrote in the report. Even as the U.S. currency advanced and gold fell on the European crisis in recent months, “it is too early for the dollar to reclaim this status,” they wrote.
“The case for higher gold prices remains in place,” the analysts wrote. “U.S. economic and employment data has now disappointed for several weeks, European election results point to further stress in the euro area, while anecdotal data suggests that physical gold demand remains resilient.”
OTHER NEWS
(Bloomberg) -- Silver Futures Start Trade in Shanghai for Producers, Investors
Silver futures in China, the world’s second-biggest user, began trading today amid expectations for demand from producers seeking to manage their risks as well as investors aiming to protect their wealth.
The September-delivery contract, the most-active, traded at 6,145 yuan per kilogram ($30.27 per ounce) at 9:41 a.m. on the Shanghai Futures Exchange. It was priced to start at 6,166 yuan, higher than silver’s close on the Comex yesterday as the price incorporates China’s 17 percent value-added tax on imports.
The exchange, China’s second-largest commodity bourse by volume, aimed to help producers to hedge risks, Vice President Huo Ruirong said last week. The metal doubles as an industrial component used in solar panels, electronics and batteries as well as a protection of wealth that’s cheaper than gold.
“As an industrial metal with currency characteristics, silver will attract a lot of investor demand, especially from retail investors,” said Wang Ying, analyst at Beijing Antaike Information Development Co. “This will probably be bullish.”
Silver futures in New York tumbled to a four-month low yesterday on increased concern that Europe’s debt crisis will escalate. The July-delivery contract on the Comex traded little changed at $29.235 an ounce.
Prices in New York may average $35.40 in the fourth quarter, according to the median of 11 analyst estimates compiled by Bloomberg, as the global economy recovers. Manufacturing in the U.S. and China grew in April at close to the fastest rates in a year, increasing speculation that the world’s biggest economies may withstand the fallout from the crisis in Europe.
For breaking news and commentary on financial markets and gold, follow us on Twitter.
NEWS
Gold inches up; sentiment frail as Europe woes persist - Reuters
Gold Rebounds as Slump to Four-Month Low Spurs Investor Buying - Bloomberg
Euro Global Poll Shows More Than 50% Predicting an Exit - Bloomberg
American Eagle silver bullion sales down 23.5% from 2011 - Coinworld
COMMENTARY
Debunking Popular Gold Myths – True Economics
Sprott On Gold Market Manipulation & Why Silver Will Outperform Gold - CNBC
Mining For Minerals On Asteroid – Zero Hedge
Extraordinary delusions or the madness of machines - GoldSeek
»
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Bank CDS are exploding
+10% on weekly basis
Goldman up 20 points
http://www.cds-info.com
The kiss of death. So now, I guess we wait for about $1200 to resume stacking?
FWIW, Goldman has been consistantly pro gold for a few years now. I ignore everyone's targets. Mine is 2100 by December and it will probably end the year around 1850.
I don't care if gold is $5000 or $50 by December. I'm on for the ride and stacking what I can.
All your gold is belonging to us Muppets.
In other news a Fatwa has been issued for the heads of Gordon Brown, Bob Rubin, and Chuck Munger.....details to follow.
Now that Goldman is in the game, they will be looking to manipulate the price to skin traders. This is why the gold market will move in seemingly irrational ways. It is not irrational to Goldman. The gold market of 2002-2010 is gone.
They're simply talking their book. They want it $100 higher now, where they, once again, join in on taking it back down.
That is idiotic. If you are buying you should want it to be $50.
Yes......all the idiots are waiting for $50.......or $1200.....same thing.
If the price of gold were $50 in any second, ever, from now until infinity using FRNs, it would only last a few milliseconds. Within 1 hour, Benocide would unleash the fury of $20trillion FRNs and this game would be over. Hyperdeflation met with hyperinflation. That's the only way to party: banksterstyle.
I agree, if you follow ZH and Tyler, this can only mean that Goldman is going to dump its gold holdings because it expects gold to go down in price.
The extreme bias on this site is amazing (and at times contradictory).
Sorry almost forgot, Buy (physical) Gold Bitchez!
GOLD WILL NOW BE WORTH LESS THAN SILVER.
That is already happening.
1 oz of gold is WORTH LESS than 5,000 oz of silver! Won't someone please think of the children!
I don't think that will ever happen... However there is less silver in the world than gold.
But silver tarnishes(rusts), gold does not.
goldman with an upbeat gold forecast? that means gold is about to get pounded down. remember all the rosy forecasts from goldman/jpm/etc last year just before the slamdowns? I'm telling you, physical buyers better hedge with gld puts or inverse etf. the gold chart is looks awful. and the banking cartel will enjoy slamming it down to demoralize phys buyers.
deflation before hyperinflation
Please spaz out somewhere else. Europe is falling off the cliff.
Last chance to buy gold cheap. If you can't run with the big dogs head back to the porch.
Even so, this is a great opportunity to get in!
"I'm telling you, physical buyers better hedge with gld puts or inverse etf."
LOL.
uh oh bad fer the goldbugs....
I actually feel pretty good.....of course I did start the day doing bong hits....so my thoughts could be a bit skewed.
Anyone got any twinkies?
Silver haze bong hitz!!! Golden lights bingerz!
yeah, the forecasts from GS and JPM on PM's have sucked...well, not just on PM's, on just about everything they forecast have sucked.
Hmmm....you don't suppose....naaaaa.
Damn it - guess that means I'm now a Muppet! Gotta go with Animal..dude rules.
Coooooooooookieeeeeeeee
As much as I love ZH I get irritated by the relentless plugging of higher gold.
I want gold much lower, as long as it's physically available. Furthermore gold is outrageously expensive at the moment, not against QE/LTRO/monetary base expansion, but just in money. People don't have money any more and the hedge funds are all-in and will have to unload once the margin calls start coming in. And I won't start with manipulation and intervention by central banks.
For these reasons I think/hope gold is going to crater, and that is a good thing. The lower the better, for the long run. Yes I am long gold and will be as long as the EUR exists, but with EUR/USD moving to parity gold has only one way to go (in EUR): lower.
Rejoice, don't be sad, lower prices means more bang for your buck.
Back during the Weimar hyper-inflation, there were many pygmies in South American jungle that had no money at all. Yet, despite the fact they had no money, gold still went up in price.
Orca if people don't have any money anymore than how much will gold falling actually help those people? Unless maybe it drops 90%....
It won't help these people, they are pawning and selling whatever 8kt. "gold" they have as it is. It will help me.
Gold is, as my good friend Buffett points out, intrinsically worthless. Moreover, as my even better friend Munger reminds us, "civilized people don't buy gold".
I am uncivilized in a Darwinian sense. I am not poor and I want more stuff, physical only thank you very much, no leverage, no funny games, just the bars. The lower it goes the more I get. The more I get the more I have. The more I have the richer I will be a.f.t.e.r. the global reset on fiat ponzi.
What is time, again?
http://www.youtube.com/watch?v=8Moh7DXMk8g
Warren Buffett is rolling in his grave over this.
ROTFL
.....and he's not even dead yet.
He is dead to me. His gold comments were the equivalent of that Kony film director whacking it by the side of the street. Sudden loss of all credibility. Every historical case study shows gold as hard money outperforms "productive assets" which actually become less productive or even die in monetary inflation. Buffet speaks uneducated nonsense.
Dude....why the hate? He stopped the oil pipeline so we could wean ourselves off fossil fuels....and he could make more money shipping the black gold on his trains.
Thanks uncle Warren!
Ponzi schemes gain trust. Then they spend trust. Then they disappear. Buffet is spending his reputation and trustworthyness. Since 2008 he has done nothing but wallow in a mudpit with the other useless eater hogs praying farmer Bernanke will keep the slop coming and not butcher them.
In response to your comment, yeah. More evidence of how the old failures of our system cannot adapt. They can only succeed by making progress towards a better newer solution fail through political connections.
Ohh SNAP... Now dont all you PM bugs have to sell???
Sell it for what.....paper?
Correction, should read "only one way to go (in USD): lower"
Do you believe what GS says?
You new around here? Of course we don't believe what GS says, we fade the call. That's why we're now looking forward to lower prices. Keep your powder dry for when it goes on sale.
Newmont's been hit pretty hard over the last few weeks as well as mid cap Randgold Resources which too has taken quite a beat'n lately.
Both XAU & HUI/GOLD ratio's are at extremes......time to get my shopping list out.
if they slam it down ya gotta have some ca$h knowing it may be the last time we see it smacked down. After the next round of debauchery they won't be able to keep it down. stack & pack to defeat the banksters. You know silver w/b destroyed also before the banksters give up the ghost and i w/b ready.
if they slam it down ya gotta have some ca$h knowing it may be the last time we see it smacked down. After the next round of debauchery they won't be able to keep it down. stack & pack to defeat the banksters. You know silver w/b destroyed also before the banksters give up the ghost and i w/b ready.
And my investing model is ABCD too: Anything Bernanke Cannot Destroy
Gold is more difficult to predict than silver-dip will last till early June ( while silver is bottoming right now) - but 1840 USD/oz in 6 months ( that is till Middle of October) is a given-I guess they have taken the number from my October 2011 gold 2011-2017 prediction chart:
http://www.tfmetalsreport.com/comment/78024#comment-78024
Press right button, view, zoom to see detailed time/values.
3 older than 6 month prediction charts play out nicely - pictures over the link, especially EUR/USD (Much better than Goldman for sure) , also silver, somewhat gold, 2 months old DJIA prediction chart as well:
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=1820#p37444
http://www.tfmetalsreport.com/comment/78027#comment-78027
And, of course, 7 month old GSR prediction chart:
http://www.tfmetalsreport.com/comment/78041#comment-78041
I guess they deserve to get also some continued accuracy in predictions in future-meaning they might predict future months as well?
heh I just noticed you aren't using log-scale charts :D I guess the point is made either way it's just nice to see the % growth comparison more clearly into the deeper past...
We haven't seen the bottom yet this is clear now. Don't sell, don't buy, wait at the sideline. Dennis Gartman isn't often right but I'm afraid he was right this time. Even a broken clock...
Looks like I picked the wrong day to stop taking Lithium.
http://www.youtube.com/watch?v=VmW-ScmGRMA
Can someone explain to me how India seems to constantly have a currency crisis when they own all the gold?
their people own lots of gold not their government..
Re: The title; even a blind sow finds an acorn once in awhile!
Jeeezzz... I was actually thinking of adding some gld calls...
I should thank them for the heads up and stay the fuck out of it
Folks have no dividend and no interest on their gold for almost a year. Weak longs are puking and will continue to do so in the near term. USDINR has also slowed buying from the worlds largest gold consumer. India accounts for 20% of world consumption yearly. The currency has continued to decline as India slows and rates there fall. The decreased buying power (increased Gold price in relative terms) is stalling gold sales in India.
They don't want gold up against the Rupee- or any other currency.
Just tell it like it is.
that would be "constructive t/m" to you Goldman. I DEMAND ATTRIBUTION!
Goldman forgets to note they will force it down to $1,000 before it hits $1,800...
......and the dreamers come out of the woodwork.
in 2 years i'll buy the GS building for 300 Oz. of silver. And i will shit on your desk Lloyd
Your, "PREACHING TO THE CHOIR" Goldman...
Even with this big price drop...i can´t see anyone or any Central Bank selling THEIR gold....is there really some accountant with glasses telling their board of directors to sell their gold bullion and buy US treasuries...or Groupon stock???? i don´t think so. This is a paper raid.....the people/countries that like gold are scooping it up.....and in the near future they wilol own most of the real metal.....but the Boys with the HFT´s are high fiveing because they "made" a quick paper buck.....sad but true....
I dont need a dollar dollar, the dollars gonna bleed!
So are we still in line for $2000 gold in 2012? Like we were supposed to be in line for $2000 gold in 2011.
People should stop being worried about where the bottom in gold is and start worrying about where the bottom is in housing, unemployment, investment, deficits, wars, house foreclosures and house prices. In case anyone had not noticed gold has looked after itself very well over the last 6000 years without any help from Goldman Sachs, Bernanke, Roubini, Nadler and Buffett.
Solid. +1
1. does anyone know GS's track record re: their high handed prognostications over the yrs?
2. how much Au does GS own?
3. shorting Au has been my best "investment" over LTM
Come on, who really gives a f*** what Goldman thinks? You buy the real stuff for the right reasons, who needs the cheerleading? All you're doing is tempting people to bet on the paper, and you know paper traders deserve to be corzined.
GS can go blow. Don't care. I'm gonna keep stacking ALL pm's as lon as I can.
Having read Zero Hedge for years, doesn't this mean that Gold prices will now go down? Article after article talks of GS selling out their clients. Unless this is a game in a game of I know what they know, then I suppose prices are forced further down up until the election. (6 coincidental months). Which means perhaps buying window for long term holders.