Goldman: "Stay Long Gold"
For what it's worth, Goldman likes gold. "Consumers: We expect gold prices to continue to climb in 2011 given the current low level of US real interest rates. Further, with our US economics team now forecasting slower US economic growth in 2011 and 2012, we expect US real interest rates to remain lower for longer, supporting higher gold prices through 2012. Consequently, we recommend near-dated consumer hedges in gold through 2012. Producers: With gold prices expected to continue to climb through 2012, we find hedging opportunities less attractive for gold producers at this time." In other news, Goldman also likes Silver, Copper, Zinc, WTI and Brent. In other words: QE3 is coming.
Details on Gold...
Trading recommendations
Rolling long Gold: Buy December 2012 COMEX Gold (initial value of $1,800.5/toz, current gain $423.9/toz)
We expect gold prices to continue to climb in 2011 and 2012 given the current low level of US real interest rates, and as a result recommend a long gold position. With expiration approaching, we are rolling our outstanding long Dec-11 COMEX gold trade recommendation, entered on October 11, 2010 with an initial value of $1,364.2/toz and a current gain of $423.9/toz, into a long Dec-12 COMEX gold future position with a reference price of $1,800.5/toz.
and Silver
Over the long run, silver prices tend to track gold prices. Thus, our silver forecast reflects the historical ratio to gold.
and Copper
Long Copper: Buy June 2012 LME copper (initial price $8,804/mt, current loss $1,153/mt)
Although our long copper position opened in May 2011 remains substantially under water, our 12-mo copper price target of $9,500/mt suggests substantial upside from current depressed levels. We caution that concerns about the European sovereign debt problems and slowing economic growth are likely to continue to overhang the market in the near term. However, we emphasize that EM-led global economic growth, combined with material disappointments in copper production on weather disruptions, labor unrest and declining ore grades, suggest a continued deficit in the copper market in 2012. Further, we maintain that a potentially powerful upside catalyst still largely lies ahead in China should policymakers convincingly shift to an easier stance and/or should lower prices increasingly entice Chinese buyers back into the market. Thus, we continue to recommend establishing long positions in copper, especially on sentiment-driven short-term dips.
and this being Goldman, of course, Brent and WTI:
Long NYMEX WTI December 2012 contracts (initial price $90.79/bbl. Current gain $5.93/bbl)
We recommend a long position in the NYMEX WTI December 2012 contract, as the clearing of the surplus at Cushing has reduced the risk of breaching the storage capacity at Cushing and we expect the upcoming rail capacity that comes on line in 1H12 to help clear the crude oil surplus in the Midwest, pushing WTI prices closer to Brent prices.
Long ICE Brent July 2012 position (initial price $105.16/bbl, current gain $2.93/bbl including loss on original position of $1.95/bbl).
We have pulled the long position in the ICE Brent December 2012 contract forward. With the timespreads in Brent now moving more with concern over European debt than prompt Brent crude oil prices, the ICE Brent July 2012 position is closer to the tight physical crude oil markets which we expect will be less affected by flare-ups of concern over European debt, and which we expect will tighten further in 1H12.
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Or Qe3 isn't coming. With Goldman you never know which side of their book they're talking...but it's never neutral.
Correct trade for the wrong reasons. The reason to hold gold is not low interest rates, but the terrible management of debt in USA, Europe, Japan, the monetization that is coming and the confiscation of savings via deterioration of real returns.
<sarc>Don't buy physical. Just buy futures. You're safe there... </sarc>
I think we all know the drill. Fade the Goldman call...
I can only assume this means I should sell!?
Perhaps they're pushing the GLD.
To what end I do not know.
That is an excellent notion.
Perhaps they(and some close friends) would like to lighten up on the GLD at this time, to reposition(quietly) into physical or one of the closed end and allocated funds.
But GLD is physical.
Either way deflation is coming before the printing.
Methinks something wicked this way comes.
cometh
By the pricking of my thumbs,
something wicked this way comes. Bill S. Macbeth.
Bummeth.
Who'th Macbes?
I wathn't refering to anysing. Mithter.
Negative real interest rates have been in vogue since yr. 2002. So has the rising price trend in gold.
http://www.NowAndFutures.com/forecast.html#predict_gold
Aye. They never give out 'free advice' to anyone including their mothers. Then again Christmas is approaching.
Get ready for another run up in gold in prep. for the smack down. The last time Goldman was this bullish gold went from $1,650 to $1,900 then back down to $1,600. This will be no different. Except maybe the entrance and exit points. Buy and hold the physical. Play the paper GLD if you have the stomach and expertise. But for GOD's sake pull profits and add to your phyz. Anything other than this and you are dancing with the devil.
being long gold that's about the last thing i wanted to hear.
Tell me where to get both at these prices, be happy to take someoff your hands.
Until the EU folds like a book, these pries will not return.
was this advice for customers they screw a lot or for customers they only screw a little?
that is no lie, when the squid starts talking nice about the noble metal, i don't like it for sure.
Shit, anyone want to buy some gold?
Goldman shorting au as we speak
In case someone is interested I speculated on Friday about a possible gold smash down scenario.
You can find it on ZH here:
http://www.zerohedge.com/news/morgan-stanley-issues-goldman-mirror-image...
what about 2008? gold was down for the year during that time , correct?
Incorrect, ended positive.
it sure didn't have that positive feeling........
Yes Gold recovered by the end of the year, but the take down occurred many months earlier.
Anyway, I do think that scenario is not very likely to happen (although not impossible) but if I was one of the evil masters that’s what I’d do.
I'm no trader, nor a paid "investor" of OPM, nor a gambler, nor a millionaire nor someone who pretends to be any of those. I'm a 9-5 stiff with a family. And a mortgage. And a 401k that I can't seem to square myself with relying on. I read ZH because of, well same reasons you all do, most of you. ZH is a yippitdy little Toto tugging at the curtain of the "Wizard", I mean that as a compliment. As the last five years of swelling prices and salaries that don't swell at the same rate sunk in I started buying PM in June with any bit of cash I could beg, borrow, or steal. I started hunting around for insights and info on the price, the value, the market. I came across Jim Sinclair, GATA, Turk, all the biggies and then I came across ZH, which I now read religiously.
El Indio, I for one have been reading your posts and I don't consider them contrarian, first off, in fact, from what I've seen there are moves in price of gold of 10-20% with regularity so I agree that the expectation of smackdown comes with the expectation of further upward climb. I haven't been watching long enough to sense the cyclical moves to back up my sense of regularity in the price movement. I do see that there are big players making their own moves, there is the opacity of the paper market (I don't have a degree in finance I can't fathom how you can trade something that you don't own and effect that price of something you don't own), the CME who drops margin hikes like they were pile drivers on the price of gold ... and the fact that many gold biggies seem to remind traders that the market is "violent" and "chops". So I'm not going to down arrow your comments - in fact I am a PM bug, officially, in reality, a holder of physical and with a sense that caution with one's wealth is most important right now, especially if you do not have "wealth" to spare.
Hi ParkAveFlasher,
You are right to be cautious and you are right to take anyone’s views with pinch of salt. Nobody knows the future. I’m a PM investor too and I’m not selling anything even if we get a huge dip. I only try to time my buying to get a better average price. Buying regularly is a good strategy, buying the big dips only is even better and that’s what I try to do. Regarding my views, I try to anticipate the worst and be prepared for it, but I only act on facts.
I share my views to get feedback from you guys so thanks for your comment.
EL INDIO, Ditto on that. My strategy exactly. It has kept me ahead for the last 19 years!
What I'm seeing PAV, is diminishing returns on the smack downs. We are going to see more of them, but there's a limit to what they can accomplish. During the last one, they drove gold down to sub $1600 levels, but that overnight spike down to $1534 bounced right back above the $1600 level. My guess is they came close to decoupling paper gold with physical. A number of gold vendors experienced technical problems with their web sites at that time, and I bet it wasn't a coincidence.
So what I'm saying is we are likely to see more of the same, and this call by Goldman heralds its coming. More of the same: A big drop in prices combined with multiple margin hikes, a spike down overnight, and a bounce right back up to a range that will stay in place for weeks.
This is all about stalling for time so that they can prepare adequate gold reserves at the central banks (and get rid of any and all tungsten). China is the least prepared, having more foreign currency reserves on its balance sheet than gold. Therefore, we are seeing all the bargain gold being traded during their session, not ours. This isn't a coincidence, because if you are trying to set up a viable monetary system based on gold, all the principal players have to be ready before you can make your move.
Thanks EI and SW. This is a high-value site. In reading, I feel like a pilot fish drafting alongside the shark but in commenting I take a bite for myself.
Ya know, if I were Goldman I'd start headfaking those who think they always know what they're going to do next. For instance in this case, they could say Gold's gonna go up a lot and actually be saying exactly how it's gonna roll out. Then when it does and most went short because they thought Goldman was too, margin calls baby, margin calls - that plus one hell of a strategy to keep everyone off balance.
Presumaby silver too.
Now that they have control over the ECB printing press I wouldn't doubt this call...
After you go long expect a slam to stop you out.
Just the standard MO.
Yes, just before a big move the first mouse gets killed. First the shake out, then the second mouse gets the cheese.
I'm out for the short term deflation mode. This just confirms my sentiment.
Can't...stop.... the.....urge.....
FUCK YOU'S Goldman Sachs.
I'm a gold bug all the way...(PHYSICAL)
But when the Sach says go long,you know some naked shorting is comming up in a big way,
Ps.
In case I forgot to say it....
FUCK YOU'S Goldman Sachs,&JP Morgan.
Probably means no QE3 near term so expect a big deflationary crash to hit equities and commodities very soon, they're shorting into the crash/deflationary event. When they tell clients to go short that's when QE3 is near term, in my humble opinion.
Nope their at least as smart as we are, and they know wht we know.
The Euro is going down, and the dollar will be the GO TO unsafe haven of fools yet again, and the metals will drop 20-25%+.
Safe refuge, my ass.
For the amount of printing already done, I believe gold is pretty safe around here. Gold hasnt priced in anything, not by my view anyway and is likely underpriced no matter if theres no future printing, that in itself wont cause gold to drop.
If I have excess cash at the end of the week I will buy physical, beside land its the only thing I can guarantee will have some value in 2012 and beyond
^--- + 1 and yes to all you guys above.
That is my strategy as well. I buy gold when I have extra money, the price does not matter. Goldman's call I ignore, but it may be a short-term bearish indicator. Remember, GS makes NO MONEY if their customers go out and buy gold...
In this political environment, there can be no QE3 with the S&P at 1,260 range and WTI at $99. If some EU nations default, which most all concede that will happen, the USD will surge. Then US will have opportunity to further QE as commodity prices relax. Long-term gold/silver/oil UP. Near-term 0-3 months, they will drop 15-25%. The Santa rally will not happen and Jan will be a down month as well.
If I were a central banksta, that's when I would use multiple margin hikes and assault gold prices. Keep your powder dry, buying opportunities are on the horizon.
The central banks won't do anything until the markets beg for help. They have to be invited thru the door before they can consume you.
COMEX gold to zero, then.
I've been saying that for a while.
Physical only, guys. When all this paper crap collapses, it will force a shift of purchasing power from those who own paper to those who own physical gold and silver. It's like having two balloons connected by a sealed valve. One is full, the other empty. when the valve is opened, the air moves from one side to the other, bringing the air pressure/price to equilibrium. Even better, the first balloon is under a pneumatic press, and will force ALL of the air into the other side. This will happen with the gold and silver markets at the very least, and may happen with many more markets as gold and silver return to their role as currency, snatching back that power from an overinflated paper economy.
Did you hear about Celente?
feel bad for the guy, he is one of many that lost money with the MFGlobal collapse. I hope he's buying phys now
I think the irony is kind of funny. For a guy who is against paper to be caught up in MF global with paper gold was too much.
this guy gets paid to go around talking about the end of the world scenerios and there he is getting caught up in some place he was not supposed to be ...........weird if you ask me.......
he's been right way more than he's been wrong, so give him some credit. but it is odd that he got caught with this MF bull shit
yeh like a broken clock, he is right occasionally. he is about on the same level as robert prechter if you ask me.........
The captain of the Titanic was right more than he was wrong as well but that one time he was wrong was a doozy
3 rights make a left
since he and alex jones seem to be on the same page, maybe he can get on alex bullhorn jone's radio program and explain this unfolding event to the lemmings out in flyover country. this guy had no business dealing with mf global with his client's money especially with the track record of this asshole corzine.....hell, celente lives in new york which is of course right next to jersey. did he ever read anything bad about corzine when he was the gov? this is pure bullshit........
Comay,
Mr. I have it all figured out, screwed himself.
Buying paper Gold limited his risk(so he thought), for years he's been preaching gold, and silver..............recession, depression, Americas done, gone.
And he invests in the only thing that can save his ass-ets,in PAPER?.
Celente deserves exactly what he got, when you think you OWN gold & sliver, and do not take possession,you are asking for it.
Celente of ALL people should have known better.
maybe this dipshit should not show his face around alternative news media for a while. doing the very thing he tells others not to do and then he loses all of this client's money doing it. what a jerk...........if i had any faith in this guy, which i didn't (and that is another story) i would be highly pissed off at him right now. this proves without a shadow of a doubt the guy is a bullshit artist.
I don't think any MF Global customers deserved what happened to them. That said, Celente gets zero sympathy for his apparent hypocrisy in touting gold and holding paper.
DosZap, bernorange,
Celente deserved his fate by betting om paper while preaching gold. MF Global customers of course did NOT deserve theirs, but, it is up to each of us to do our own due diligence about those with whom we place our money. I did not even know that Corzine, Biggest POS on Planet Earth TM, was running MF Global. But, after running NJ into the ground, the rat had to go somewhere...
I think the headline was "stay long Goldman".
This means they're dumping their stuff expecting the bear market to continue?
Shit! I was thinking of getting more Au soon, but seeing GS advertise it I'm gonna wait. There's something off about doing what the squid approves of.
I wont believe a word any of these fuckers say about gold until they expose the fractional reserve ponzi that is the paper gold market
And hence the price setting method for so called 'spot'
Physical assets of all kinds people. All paper going to zero, period. I was wondering why the only two venture capital guys I knew were buying up land (not housing or traditional real estate, LAND) and mineral rights back in 2009. These same two guys have homes on islands in the Caribbean with live-in security and servants. Lots of things starting to make sense now.
LawsofPhysics
I was wondering why the only two venture capital guys I knew were buying up land (not housing or traditional real estate, LAND) and mineral rights back in 2009.
Let's see how long they get to KEEP IT.
As a former ARMY AMEDD medic and having met some of the members of their security teams, my guess is that they will do fine. Just like in any business or profession, there are professionals who are really really good at what they do. It may be fun to listen to some red-necks or inner city gang bangers rant about "revolution", but the truth of the matter is that the "revolution" is already being planned, and the professional killers are handling it, but then again, there always needs to be fodder for the sheeple. New world order, same old lies, hedge accordingly.
Lemme just say something here about the 'permanency of security professionals' and such. There is no security professional that can't be bought-out or covertly coerced - one way or the other. Those same professionals if push came to shove will turn on their masters if necessary to save their own skin - and especially that of their family.
Blood is thicker than water to coin that old saying and a lot thicker than devalued worthless cash if that fiat-event should happen. If it were me, it would only be direct-DNA family that surrounded and protected my enclave whenever possible. The smartest of the big shots you just described don't have significant looking enclaves to begin with. That just attracts them as targets. The smartest ones always use whenever possible other people's significant enclaves and they don't stay there for long at any given time either. Unless your boys are akin to big league drug lords with interior government military bought off protection, your 'smart' boys are fucking sitting ducks private high-caliber security or not, in another country or not. And that is ultimately dumb. If you're not rich or connected enough don't play into that game of 'feeling' safe. So are they really secure?
Trust no one - particularly outside of your own blood.
Judging from the example of the fall of the Soviet Union, the rich and powerful have no problem at all in weathering these storms. In fact, it makes life cheap for the little people, so the wealthy become even more powerful.
Please junk me for saying so, but I fear it is true.
Kinda related to being long gold-- I have some $$ for my kids' college savings but I don't want to be all sheeplike and go the ESA/529 route, so would allocating it to physical PMs (100oz silver bars and/or 1oz krugs, etc) be a good idea?
It'll be ~13 years before my oldest is college age so surely we'll see a crash/ monetary restructuring by then which would validate (and reward) this kind of unorthodox college savings plan, yeah?
Sorry for a crappy first post. Will add value next time, pinky swear.
@Occam's:
Another question to ask is: Assuming a crash/monetary restructuring occurs during the next 13 years, which many on ZH see as rather likely, what will the effect of this event (event set) have on the value of a college education?
Excellent point, might be better to learn a tradable skill or teach your kids how to manage rental or agricultural property.
Wow, great point-- I didn't even think to assess the impact of such a monetary restructuring on the current educational regime, which as you imply would definitely be significant.
Thank you.
Occams,
WAIT until the takedown, and load up.( the EU/Euro is dead meat, and this will chase Europeans into a just as stupid dollar flight, and Treasuries.(Safe have crock)
The $ will go up to the upper 80's-90's, and gold will drop like a rock.
I would not by here, chasing the price will get you screwed every time.Unless it gets to under $1,600.00 I would not be a buyer again.
Physical, in your possession or where you can get to it.( IMHO, and for what it's worth).
Dollar cost averaging. Of course the game is rigged but as we all should know by now that a chaotic system on which artificial stability is imposed only becomes more subject to imprevisible volatility. If the price drops at 1500$ will we be able to find any physical without massive premiums? What if Goldman is anticipating the paper price/physical disconnection that has been discussed time and time again as the whole paper game becomes more transparent?
Don't listen to me too much; I'm broke-ass and don't pretend to be a good money manager. However, I've found that I get enough security through buying 1/2 an oz every time that I can afford it without spending more than 50% of my savings. Doesn't matter much if price is up or down when you understand that a year more will inevitably take it much higher and that you buy it with the goal of sitting on it.
Last time I bought gold was at 1800$. I didn't care that the price dropped way back after rising to 1950; I understand that this is just a temporary dive. I was only sad that I didn't have enough dough to enjoy the new lows ;)
http://www.youtube.com/watch?v=OAdlVRn1xYc&feature=BFa&list=PL9C80F9DFB3...
Perception Deception...its the distant distant cousin to Conjunction Function
so does past performance suggest future results?? with AuManSacks..it means they are doing the oppoite they tell their clients..
Conjunction junction, what's your function? -- sorry couldn't resist.
You still think your going to get rich... but your not.
Gold is NOT money, it can be exchanged for money. Fiat is as good as gold, well, right up until its NOT, and then whatever fiat their is, is as good as gold again. You see, its preposterous to think that in a USA or global 'reset' countries would back their fiat, well by anything other than 'The ability of the government to collect revenue via taxes'. The only CHOICE governments will have is whether or not to issue fake DEBT based currency like we do now, at our peril, or issue real money. (NON DEBT BASED)
Imagine this happens next week. Only debt ridden countries will need to reset and re issue currency. So that leaves out the middle east and China. One might think that other countries would not accept new USD . One might also think that they might not want to trade with the US or demand something silly like gold for payment. Well, here is the deal.
Any country that WANTS TO DO BUSINESS with the USA will ACCEPT whatever WE want them to. Or they can starve to death, since we feed the world. Therefore, American blue or red dollars or whatever they want to print will be accepted worldwide instantaneously.
Remember, trade works both ways, and the government, not supply and demand sets the price on things like 'gold'. A new currency would have the price of gold extremely low, but compared to the limited amount of new currency.
Couple that with the confiscation of all physical, and gold horders are going to wish they had gone on vacation with the USD they spent on their shiny metal.
Things will be BETTER here, but the same in places like Somalia, Nigeria, Zimbabwe. Here is why. Zimbabwe produces, well, NOTHING, and unlike their cousins, Saudi Arabia are not lucky enough to have massive oil reserves beneath their feet, and therefore a massive influx of USD. So, no matter how many times Z resets, the entire country will never be worth more than 1000 acres of garbage dump land in the US.
You see, China could easily do exactly the same thing America had done in the past. The problem, is that 1 Billion people suddenly driving cars, etc etc will use up the worlds (and CHINAs) resources so quickly that even those commie bastards won't do it.
Until the worlds energy problem is solved that is. Because that is a human GAME CHANGER. China, is using German Invented, US improved technology to create LFTR's on a massive scale. Thats right folks, it will be CHINA who leads the world in clean, safe, renewable energy into the future. And the country that controls the worlds energy, well, controls the world.
to your point if the country that controls the world is importing commodities and are a huge net buyer of metals then maybe that says something.
This flies in the face of all your bullshit.
http://articles.economictimes.indiatimes.com/2011-01-08/news/28433295_1_bilateral-issue-oil-india-imports
How does India trading gold for oil fly in the face of his points? What happens when India has no more gold to trade for oil? You are the bullshit artist. The fact remains, no energy, no economy, it is that simple. The laws of Nature and physics make no promises regarding anyone's survival and it take energy to do, well, anything. Again, no energy, no economy, period.
Bullshit.
There were no economies or trade before hydrocarbon fuels? Perhaps your historic timeline is too narrow.
Settlement outside USD narcofiat will be a wonderful thing. If you are refering to an average overweight fat amercian being able to afford the fuel to drive an SUV 15 miles to a drive thru for a 3 hamburgers, yes that economy is dead.
If you seriously believe this bullshit, you are going to have to learn some hard lessons soon.
So China will lead the world in new energy technologies, but all that will be done with USD settlement?...how exactly does that work out?
You are aware my reply was at bill1102inf? :P
I am now.