JP Morgan Warns Gold to Go Parabolic and Rise to $2,500 By Year End

Tyler Durden's picture

Submitted by Gold Core

JP Morgan Warns Gold to Go Parabolic and Rise to $2,500 By Year End

Gold in USD terms is 2.4% higher and is higher against all currencies and trading at USD 1,760.40 , EUR 1,234.10 , GBP 1,075.70, CHF 1,306.80 per ounce and 132,719.00 JPY.  

Gold’s London AM fix was USD 1,770.00, EUR 1241.75, GBP 1080.98. Gold reached new record nominal highs at $1,780.10/oz and new nominal highs in euros and sterling also this morning.


Cross Currency Rates

Asian equities were mixed with sharp falls seen on the Hang Seng but the Nikkei recovered to only finish down 1.7% and the Chinese and Australian stock markets actually managed to rise on the day.

The FTSE, DAX and CAC are down 0.7%, 1.9% and 0.2% respectively but US futures are showing tentative gains.

There were further signs of stagflation in the UK as manufacturing unexpectedly fell in June and the trade gap widened. This is further evidence that the economic recovery is faltering in the UK and QE has not worked. 


US Major Debt Holders

U.S. Treasuries dropped, pushing 10-year note yields up from the lowest level since January 2009, on speculation the Federal Reserve may introduce new stimulus measures today to boost financial confidence.

More ‘stimulus’, QE3 or whatever new fangled acronym is dreamed up by desperate policymakers will of course be bullish for gold and silver. 


Libor-OIS

J.P. Morgan Chase & Co. (JPM) and Goldman Sachs Group (GS), raised their gold-price late yesterday.  

J.P. Morgan now sees gold prices at $2,500 a troy ounce by year-end, while Goldman expects gold at $1,730 in six months and $1,900 in 12 months.

This may be a sign that the current sharp rally may have reached its zenith as neither bank has a great track record regarding short term trading calls on commodity markets.

In the short term there is the risk of a correction as gold’s rise is now becoming front page (on front page of FT today) and headline news.

The fact that silver has fallen in recent days and remains below $40/oz and the fact that gold mining equities have also not risen may also be a warning signal.

Gold has risen from below $1,500/oz to nearly $1,800/oz in 5 weeks (since the start of July) and is up nearly 18% in dollar terms. 

Therefore, in conventional terms gold is most certainly overbought. 

However, we are not living in conventional or normal times and the ongoing global market crash and global currency debasement means that there is a chance that gold will go parabolic as it did in the 1970’s.

Investors would be prudent to continue to make the trend their friend and any pullback should be used to buy the dip.

Those wishing to take profits might do so after two days of lower prices or a weekly lower close. However, given the level or market, systemic and monetary risk, all investors are advised to maintain a core financial insurance precious metals holding.

Gold’s bull market looks very secure for the foreseeable future due to strong institutional demand (from astute hedge funds and central banks) and store of wealth demand from Asia.

As does silver’s due to increasing investment and safe haven demand and the continuing growth in industrial demand for the versatile precious metal.

SILVER 
Silver is trading at $38.14/oz, €26.73/oz and £23.29/oz. 

PLATINUM GROUP METALS 
Platinum is trading at $1,722.00/oz, palladium at $732/oz and rhodium at $1,800/oz. 

NEWS
(Wall Street Journal)
Gold Hits Another Record

(Financial Times)
Traders target $2,500 high for bullion

(Wall Street Journal)
JP Morgan analyst sees gold at $2,500 by year-end

(CBC News)
Gold may hit US$2,500 in 2011: JP Morgan

(Reuters)
Britain, other eurozone countries face ratings cut: Jim Rogers

COMMENTARY
(The Telegraph)
European Central Bank must go nuclear to save Europe

(King World News)
If you think gold is flying now, wait for QE3, Turk tells King World News

(24hGold)
Change You Don't Have to Believe In

(The Telegraph)
The Bull Case for Gold

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
66Sexy's picture

Meanwhile, there is no Platinum physical bullion available. Go on, check Apmex. They aint sellin'.

tarsubil's picture

I just hope they don't pull that with gold if gold corrects on more magical news.

caerus's picture

gc margin reqs are still low...plenty of room to hike sometime

ratso's picture

Tyler makes many great points over time.  This is not one of them.  The market conditions for gold in 1979/80 versus now are completely different. Gold has de facto achieved currency standing by the way central banks have been buying. Silver on the other hand is not treated as a currency.  It is being treated like a commodity by the markets and therefore being priced accordingly.  Silver bulls have been wrong and not understood the difference sufficiently.  Platinum which 20 times rarer than gold is also just a commodity.

Gold will remain volatile but the direction is unmistakeable.  When Saudi Arabis sold its gold holdings to Libya at the bottom some years ago that was the buy signal because they are pretty much always wrong.

 

Motley Fool's picture

Would you please provide a source for that last paragraph. Thank you.

ManufacturedOpinion's picture

The source is the internet - check it out.

And, BTW ... had to buy some puts on gld today, thanks to JPM hawking it (and it's spectacular run recently).  Just consider it a hedge against all that phys.

.

.

.

The only thing the USA manufactures these days is YOUR OPINION !!!

RockyRacoon's picture

Opinion?  We all know what that is since everybody has one -- or several.

But they are still base on "facts" as presented.

A good reading list always helps.

Got gold?   Here are some reads from Ed Steer today:

 

1] Gold Coins Sell Out in Lisbon as Biggest Bet Sees 22% Gain, Bloomberg

2] South Korea buys gold for first time in 13 years, WSJ

3] Putin calls U.S. 'a parasite' on world, denounces dollar dominance, Reuters

4] Paul proposes bill to cancel $1.6 trillion in U.S. debt to Federal Reserve, The Hill

5] Emerging world buys $10 billion in gold as West wobbles, Reuters

6] The Real Banking Crisis: Eric Sprott, Sprott Asset Management

7] After buying most of it, China gets mad at U.S. for issuing so much debt, Bloomberg

8] Short-Term Yields Going Negative at Bank of New York, Zero Hedge

9] Hoarding gold beats charts over 25 years: Technical Analysis, Bloomberg

10] As many as 20 owners for each bullion bank gold bar: Jim Rickards, KWN

11] Jim Sinclair is interviewed by GoldMoney's James Turk, GATA

12] Silver is 'investment of the next decade,' Sprott says in GoldMoney interview, GATA

13] MineWeb's Lawrence Williams reports on GATA's London conference, GATA

14] US Can Pay Any Debt It Has Because It Can Print Money To Pay It: Greenspan

15] U.S. could run off with other nations' gold, Rickards tells CNBC

16] Ron Paul Slams Obama's "Monstrous Creature," the Super Congress

17] Eurogeddon postponed again as ECB gains three weeks, The Telegraph

18] Walker's World: The Unseen Punch, UPI

19] Debt Crises and Market Turmoil: Is The World Going Bankrupt? Der Spiegel

20] The world runs out of options, Ambrose Evans-Pritchard, The Telegraph

21] The bull case for gold, The Telegraph

22] You'll Be Buying Gold at $2,000/oz - And Higher, Casey Research

23] Fed May Announce QE3 Now Creating Gold Explosion: James Turk, KWN

24] Gold & Markets Signal More "Great Recession" - Richard Russell, KWN

25] Doug Casey Interview, King World News

26] Jim Rickards Interview: All About Gold, King World News

27] JPMorgan analyst sees gold at $2,500 by year-end, WSJ/GATA

smore's picture

"Gold has de facto achieved currency standing by the way central banks have been buying. Silver on the other hand is not treated as a currency.  It is being treated like a commodity by the markets and therefore being priced accordingly. "

I had to laugh when I read this!  You have put your finger EXACTLY on why silver has far more upside than gold.  Silver is not treated as a currency YET!  But when paper currencies really crash, it will be, and the catch up in value will be unprecedented in financial history.

The direction of silver is also UNMISTAKEABLE.  Try looking at a 10 year chart sometime.  Sheesh.

 

Race Car Driver's picture

Apmex this, Apmex that - like they're the end all/be all of PMs... fuck Apmex. Their prices are outrageous and their webpage is annoying.

Here's some platinum: http://www.providentmetals.com/bullion/plat/us-plat/ape.html

Balmyone's picture

While I agree with the sentiment, why not go to http://gainesvillecoins.com for even better prices.

Provident also has a crappy BBB rating.  I've heard some horror stories about them. 

papaswamp's picture

Yea but silver is looking juicy....

vitoox's picture

Sooo, Max Keiser helped to pump and dump silver with SLA.

Why do we read JPM 'prophecy' 2,5k/oz for a second day in a row here on ZH?

Boston's picture

Platinum available at Tulving and Provident.  I bought some from Pt eagles Provident yesterday; no problems.

Cdad's picture

Yes...sell gold today.

Most importantly, sell the VIX by picking up XIV.  This will probably be the best performer today...although I would not hold it very long.

Gmpx's picture

I have personal experience with using gold during my country collapse. Gold does save its value - this is true. But its does not work for normal people.

It is dangerous to keep or to move.

You cannot profitably exchange it for food or goods during the crisis.

You need to wait until the end of the crisis when gold market reopens (say 10 years), then you can extract its value into new money (if you are still alive).

eigenvalue's picture

Which country are you from?

Gmpx's picture

USSR.

Imagine you sit in one of the looted London surburbs. You have 1 kg of gold in your safe box. Police is elsewhere. The fire started by those youths comes closer and closer to your appartment.

machineh's picture

I see your point. One needs a fireproof safe.

Bicycle Repairman's picture

Please, tell us more about the USSR experience.

Gmpx's picture

I am happy to tell more. Unlike Dmitry Orlov I was in
Russia during all the funny times and I was in small
business dealing with real situations.
If Zerohedge asks me, I can write several small articles
about my experience with Russian business. They will
be helpful for you guys.

e_goldstein's picture

If Tyler isn't interested, you may want to get in touch with this guy:
http://www.survivalblog.com/ 

DosZap's picture

Gmpx,@08:39

They are not attacking residents, take your Gold in a sack,etc, and move away from the fire.

The UK has no serious records of crime against the populace, it's raging against the Machine.(albeit they also suck when it comes to self defense issues)

Change the scenario to USA, I take my PM's, and an AR15,5-8mags 28rds each, and a Glock 20, and ten mags w/15rds.

 

 To quote an American Icon,

Feel lucky punk, well do Ya?.........Go ahead make my Day. Choose to live in fear your a victim, chose to be prepared, they lose.

Gmpx's picture

Glock will not help if they take your child and nicely
ask for your gold.

trav7777's picture

I guess we are made of stronger stock than those wankers; we can carry 1kg.

You stuff it in a backpack, and don your 7.62, filling the sack up with some extra magazines.  Pistol up on your hip, etc.

living on the edge's picture

GMPX

Great post! Your perspective fits with my expectations of things to come.

centerline's picture

Yup.  Lots of people starting to get into the camp that things can and will get very ugly at some point.  Preparation for what might come is not just gold and silver.

papaswamp's picture

Disagree...it is quite good for large purchases such as property, livestock, vehicles and large quantities of fuel.

Gmpx's picture

... or to offer it to the gang which is knocking on your dorr.
You know what was better than any gold? Good brain,
good health, good friends. And above all - luck.

Pinktip's picture

Being a gold owner,  I have already told fellow gold/silver bugs

that in the SHTF scenario (madmax).  I will not sell my livestock for gold.

Pladizow's picture

You will not have to sell your livestock, they will be taken from you!

And dont come back with some response like I have a big gun.

Sgt.Sausage's picture

==> dont come back with some response like I have a big gun

Ahhhh, but I do.

And a literal army of corn-fed, cow raising, red-neck Billy-Bob-Bubba-Joe neighbors who collect guns like baseball cards, who can outshoot any trained sniper, who hang out in the fields and woods for weeks on end, more than half of whom have done 8 years or more of military service, a large chunk of those who have done recent (multiple) combat tours in the SandBox and who would just love to have the opportunity to have at it with a few rustlers confiscating livestock. I've got 8 years prior service myself. Instructor. US Army Infanty School, TRADOC (US Army Training and Doctrine Command). I dare you to come to my neighborhood and help yourself to a sampling of the local livestock. Are you up to the task in my neighborhood?

Your attitude is in need of adjustment. Come out to farm/cattle country some time and stay a while. Your eyes will be opened. It's a different world. Really.

Esso's picture

Correct, the value of PMs lies in the ability to transfer wealth through a crisis, not buying your way out of it.

Gold and silver are the last things you should buy after making all of your other preparations.

Sgt.Sausage's picture

==> Correct, the value of PMs lies in the ability to transfer wealth through a crisis, not buying your way out of it.

Correction: History shows us, as just one example, that quite a few folks of the Jewish persuasion used their personal stashes of gold to do just that: to "buy their way out" of the country (whatever Nazi occupied country they happened to be in at the time), and start over somewhere else. These folks left any and all other possessions and preparations (other than what they could carry) - they left it all behind.

Sometimes, getting the fuck outta Dodge is the best option, and sometimes "buying your way out" is the simplest way to do it.

Smiddywesson's picture

True, nobody will be able to exchange your gold for value during the crisis at anywhere near its true value.

True, crime will be rife, both within the government and on the street

Pretty much can't argue with that.

I bought silver to add to my hoard last week for that reason.  Gold for the long run!!!

trav7777's picture

what DID work for normal people?

In the USSR, it was dollars, right?

caerus's picture

au overbought short term imo waiting for pullback to buy more

Catullus's picture

I guess Gold is going to be the leading indicator today. 

eigenvalue's picture

Silver is extremely weak. It's down 3% while gold is up 1.5%.:(

Buckaroo Banzai's picture

Actually silver is holding up relatively well, compared to the beating it took in the 2008 crash.

tmosley's picture

Exactly.  In 2008 there was still faith in the currency.  Not much left now.

Esso's picture

Yeah, weak. It's only double where it was a year ago.

Ganja Jane's picture

The volume on paper has gone apeshit. Why isn't anyone discussing it?  It's in he millions peaking at 20 M or so.

Buckaroo Banzai's picture

Sell gold, and buy...what?

SELL GOLD AND BUY WHAT???

Ganja Jane's picture

There were some turdites talking about doing this over in Turd Furgeson's neck of the woods. I don't know if anyone actually did it. They were speculating silver having a better return long run. BTFD.

Long-John-Silver's picture

Not so long ago people were talking about selling their Gold to buy Silver because Gold was stuck.

Now Silver is stuck and people are talking about selling Silver to buy Gold. Just bide your time as Gold will settle down and Silver will take wing and fly

again. That or both go parabolic due to a currency crash and then it will not matter which you have.