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Roubini Asks of ‘Goldbugs’ on Twitter “Where is 2,000?”
From GoldCore
Roubini Asks of ‘Goldbugs’ on Twitter “Where is 2,000?” - Ignores Academic Research
Gold is trading at USD 1,626.10, EUR 1,261.20, GBP 1,067.30, CHF 1,557.40, JPY 129,550 and AUD 1,643.0 per ounce.
Gold’s London AM fix this morning was USD 1,635.00, GBP 1,055.32, and EUR 1,255.18 per ounce.
Yesterday's AM fix was USD 1,665.00, GBP 1,068.75, and EUR 1,262.22 per ounce.
Gold in USD – 1 Yr (100, 144, 200 DMA – yellow line at $1,618/oz)
Gold is marginally higher in most currencies today and bargain hunters are beginning to buy after the recent price falls. The falls were due to recent dollar strength, liquidity issues in the financial system and weak technicals.
We warned in August that gold could trade as low as $1,500/oz or $1,600/oz as it had become over extended and overbought in the late summer.
How much further might gold fall? Market momentum is a powerful force and therefore further weakness is quite possible.
Support is at the 200 day moving average at $1,619/oz. Below that is the psychological level of $1,600 per ounce and the 250 day moving average of $1,571/oz.
Price resistance was seen at the $1,570/oz level between late April and July 2011 (see chart) and this level could become support as is often the case in bull markets.
It is important to note that gold’s falls have been primarily dollar related and gold has fallen by a lot less in pound and in euro terms.
Most analysts of the gold market remain of the view that this is another correction and that the medium and long term uptrend will continue due to significant investment, store of wealth and central bank demand due to geopolitical, macroeconomic, systemic and monetary risk.
One analyst who appears to have a very different view regarding gold is world renowned economist Nouriel Roubini.
The Chairman of Roubini Global Economics has again taken to Twitter to engage in some name calling and to appear to question gold’s recent price action and whether gold may reach $2,000/oz.
Nouriel Roubini
@Nouriel New York
Professor at Stern School, NYU, Chairman of Roubini Global Economics (www.roubini.com), blog at www.economonitor.com/nouriel/ , co-author of Crisis Economics
Roubini or @Nouriel tweeted yesterday evening:
“Gold at a 7 weeks low down to 1635. Where is 2000 gold dear gold bugs?”
The tweet continues his frequent somewhat intemperate and aggressively dismissive tone with regard to gold itself and people who own it. He has also been intolerant of people and experts who believe that a form of gold standard might be beneficial to the global monetary and financial system.
It is interesting that the tweet did not have dollar symbol or mention USD or dollars.
Our expertise is not monetary economics so we will leave that debate to others (see commentary). However, we would note that experts on monetary policy such as the President of the World Bank, Robert Zoellick, and former Federal Reserve Chairman, Alan Greenspan, have proposed considering a return to some form of gold standard.
With regard to gold’s price and whether it is a bubble as has been suggested by Nouriel frequently, we do have an opinion.
Our opinion has been consistent - it is that markets are very unpredictable and it is extremely difficult to predict the future price movement of any asset class. It impossible to predict the future price movement of all asset classes over different time frames and over a long period of time.
This is the reason that we advise clients to have a genuinely globally diversified portfolio with allocations to global equities, global bonds (high credit, low duration), cash and gold.
Diversification is the closest thing there is to a free lunch.
The majority of investors, both institutional and individual, will find that the best way to invest is through an institutional index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) delivered by the great majority of investment professionals.
Nouriel and many other experts continue to focus on the nominal price of gold in dollar terms. They fail to adjust for inflation and they fail to look at gold in euro, pound or other fiat currency terms.
By continually focusing on the dollar price, they completely fail to see and understand gold’s value.
Gold’s value has proven itself a safe haven both historically, in recent years and academically. There is now a large body of academic and independent research showing gold is a safe haven asset.
Numerous academic studies have proved gold’s importance in investment and pension portfolios – for both enhancing returns but more importantly reducing risk.
The importance of owning gold in a properly diversified portfolio has been shown in studies and academic papers by Mercer Consulting, Bruno and Chincarini, Scherer, Baur and McDermott and the asset allocation specialist, Ibbotson.
An academic paper, ‘Hedges and Safe Havens – An Examination of Stocks, Bonds, Oil, Gold and the Dollar' by Dr Constantin Gurdgiev and Dr Brian Lucey and was presented in November at a conference hosted by the Bank for International Settlements, the ECB and the World Bank.
This excellent research paper clearly shows gold's importance to a diversified portfolio due to gold's "unique properties as simultaneously a hedge instrument and a safe haven."
Oxford Economics research on gold in July 201, showed how gold is a good hedge against inflation as well as deflation.
Only last week, more excellent independent research was released confirming gold's unique role as a diversifier and foundation asset in the portfolios of investors, especially at a time of heightened currency, investment and systemic risk.
The independent research from highly respected New Frontier Advisors (NFA) confirms the importance of gold as a portfolio diversifier to investors in Europe and to investors exposed to the euro.
As an academic and an economist, it is incumbent on Dr Roubini to do some research on this and thoughtfully reply. Engaging in name calling by calling people ‘gold bugs’ who advocate investing in gold is not professional.
It is the economics of the playground and akin to someone calling Dr Roubini a ‘paper bug’, an ‘equity bug’, a ‘bond bug’, a ‘dollar bug’ or God forbid a ‘spam bug’.
We have some respect for Dr Roubini as a macroeconomist and have indeed shared many of his concerns in many years and shared them with our clients and the wider public as long ago as 2005 and 2006 when we and he warned that the US would soon follow in Iceland’s footsteps: (‘Today Iceland: Tomorrow Turkey, Hungary, Australia, New Zealand, US’ 30/03/06)
However, giving financial advice is not his expertise and he may be better suited focusing on his strengths.
Roubini is regarded as a guru by many experts and opinion makers internationally and there is a real risk that his opinions regarding gold could lead to poor and imprudent investment decisions.
In December 2009, when gold was at $1,100/oz, he said that "all the gold bugs who say gold is going to go to $1,500, $2,000, they're just speaking nonsense."
One of our clients actually sold their gold allocation on the basis of this statement. Despite gold being the one asset class that had protected them during the crisis.
It is possible we have misunderstood Dr Roubini and his opinions regarding gold and we would welcome a television debate on this matter with him.
He advocates printing money to help the economy and people. He should also encourage people to protect themselves by diversifiying and owning some gold, which can offer a hedge to the possible consequences of currency debasement.
Roubini has been fairly good at calling world economic events in recent months, however his investment ‘advice’ has been poor and he appears to not understand ‘investments 101’ which is diversification.
For breaking news and commentary on financial markets and gold, follow us on Twitter.
SILVER
Silver is trading at $29.73/oz, €22.90/oz and £19.23/oz
PLATINUM GROUP METALS
Platinum is trading at $1,448.75/oz, palladium at $617.50/oz and rhodium at $1,425oz.
NEWS
(Bloomberg)
Gold Rebounds From Eight-Week Low as Two-Day Decline Encourages Purchases
(Reuters)
U.S. gold falls 2 percent on dollar rally
(Reuters)
Weaker gold to test, but not crack ETF holder nerve
(Financial Times)
Gold ETF holdings hit record high
COMMENTARY
(Financial Post)
Nouriel Roubini’s Lapse in Standards
(MarketWatch)
Contrarians detect strong wall of worry in gold market
(ZeroHedge)
Greek Bank Run Hits Record: Unprecedented €6.8 Billion In Deposits Pulled From Greek Banks In October
(Business News Network)
Video Interview with Kyle Bass: Deposits Leaving PIIGS – Final Precursor to Sovereign Defaults
(Financial Times)
Make your own (collateralised) gold standard
(Wall Street Journal)
Is Gold the Answer to Europe's Crisis?
»
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As JP Morgan sells its self.. a Million or 100 Million oz's at a loss.. to drive the price down..
added to all the FIAT, Stock, Wanna Be Traders Selling Paper Positions to Cover Losses.. Because the Worlds Credit Markets are Freezing Up! (the Private Credit Markets NOT! the FED / ECB and / or add other State Run Printing Factory)
I see (minus Printing) 40% losses across the board.. and that is the BEST! Number! The BEST!! Case!! Scenario!!
So, as Metals drop 40%.. or until the printing machines are turned on.. (*the machines are already on, in secret.. how do you think JP Morgan can afford to Bleed Capital thru selling its self losses, for a Gain wink, wink)
Thank God Obama can arrest anyone and jail them until the State Created Terror Passes.. Thank God the United States can send the Army into Canada to help Control the People of Canada.. Thank God Canada can send Troops into America to control the Citizens of the United States..
And everyone ignored this every step of the way..
But! On the upside.. that Oil Shortage is Solved!!
Demand will be lower now.
I would add! if you can pick Gold or Silver up at cheap prices.. given the Fact the National Debt has grown to over $15 Trillion.. I would say jump on any deal you can close where physical can be purchased!
Buy Low!
and dont sell until this shit plays out!
Wow. You gold bug are quite vehement. Sorry, that you are in for a world of pain coming soon. Sold all mine this summer. Buy when gold hits $800 and Silver 10.
Natural Selection.. you are just one of those that have made it thus far because you live within the confines of the lie.
upcoming.. minus the faux protection provided by the lie.. we will see how you do in a real world, filled with realities.
Don’t forget to keep that print out, of how much money you have in the bank.. close.. you may need it as a bartering chip.
I don’t know a lot of people who will be accepting print outs with some used to be in business banks letter head at the top. But Good Luck with that!
Given Roubini's dreadful calls on the shiny stuff over the past number of years, the best he could do is just avoid the topic.
The FAKE 'valuation' of gold is a fraud due to the LEVERAGE used to 'trade' and therefore set the current price of the metal. Picture housing, if the government BANNED financializing homes, their price would IMMEDIATELY drop 90% if not more. Remember, bank holding companies and the like are trading gold using leverage of about 1000:1 and when those firms FAIL and the leverage is reduced so will the price of gold.
You mean then paper price, you mean a futures contract price, you mean something NOT! Real!
You mean a piece of paper will be cheaper.
Buying Physical, the disconnect is already here..
Call a Dealer for Bullion, right now.. let along next week or the weelk after..
and until they Print.. prices will go down.. as the markets go down..
but buying paper in the markets is NOT! buying Bars for your Safe.. as you will soon figure out.
Re Bank holding companies and the like are trading gold using leverage of about 1000:1 and when those firms FAIL and the leverage is reduced so will the price of gold
Excellent point - and it appears that that leverage is being reduced right now.
It would indeed be ironic if those banks/insts blamed for supressing the price of gold had, in fact, been supporting it all along.
i suspect the price is being manipulated down
so that certain parties can get a bargain on a
bunch of it. a holiday present for the good
boys and girls with tonnes of federal reserve notes
looking for shelter from the coming storm.
one question. can the global fiat money system
survive without much much more quantitative easing?
without inflation. answer, no. this dip, btfd,
is based on the idea that fiat money systems are not
bound to service their own expanding debt nature.
i would say do not fall for the head fake and lose
your ground. of course, i know nothing, so do not
take anything from this other than... hi!, nice weather
we're having.
"BUYERS" of gold paying no more than $1500/oz after making a few phone calls. So much for the 'physical market' being better different than the 'paper market'.
Generic gold bars are $1641/oz at APMEX. Where the fuck are you claiming to be able to get gold for spot-$85?
Get the fuck out, you liar.
The only people who actually believe there is a measurable difference wear tin foil hats.
Says the idiot who couldn't even figure out that some people may still be buying gold simply because THEY HAVE HAD ADDITIONAL INCOME SINCE THEIR LAST PURCHASE, instead of having "held cash back" because they "didn't trust gold".
sounds like sour grapes of envy, one way or the other. I guess at this stage with so many balls up in the air, its a question of holding on to "belief systems". Until things get clearer. Gold bug on not to bug...
I love a good gold article. It brings out the best in everyone.
Been here too long; probably missing the end of the world. Time to head back to the home page...
It are the swiss!!!!!!!!
Swiss are selling their gold to pump up USDCHF and EURCHF. :-)
Look at it dropping. muhahahahahaaaaa. Buy cheaper. A lot cheaper.
Shit blew right through the 200dMA like it wasn't even there. So much for a 'STABLE' thing to back a currency by, HA , muahahahahhahahahah
Gold isn't changing. Your measuring stick is changing.
HTH.
BTFD. :)
The only safe haven is
1: Water
2: Food
3: Gun
4: Shelter.
Given the precipitous drop in the PMs the last few days, I'm lending more and more credence to Jim Willie's postulation that JP Morgan intentionally crashed MFG to prevent a COMEX default.
I'm not here to defend Roubini but as I read the article, I got the feeling that Roubini just has a distaste for those who use gold to speculate rather than diversify and all those owning gold who claim it's the "best" and superior choice. Compared to a lot of crap out there though, gold is a good one.
world renowned economist my ass, more like an Illuminati banker propagandist!!
"Support is at the 200 day moving average at $1,619/oz. Below that is the psychological level of $1,600 per ounce and the 250 day moving average of $1,571/oz."
And through all of those today..
And yes, I started going long yesterday...
DavidC
1524 area weekly lower channel comes in. If that doesn't hold well good bye with your longs...
Finally, another buying opportunity!
For those who still believe that there is no relationship between the printing and inflation. check PPFCTOB Index <GO> 50% since 2004... and counting.
1. Water and water filters (water source)
2. N packed foods/seeds/equipment for growing food
3. Fuel storage
4. Weapons and ammo (some say this is #1)
5. A PLAN: safety living in numbers (5-20 is best)
6. Antibiotics
7. Communications equipment (HAM, CB, etc.)
I could go on. Au and Ag are not in the top ten survival list. After these steps have been secured, feel free to load up on all the trinkets you can afford.
Even smartarses can get the odd question right. Yes, where exactly is $2,000 Gold?
The Goldbugs' arguments are currently (temporarily?) being blown out of the water, but even my instincts tell me something ain't quite right with the current situation.
Those central bankers are clever so-and-sos; far more clever than most people on here give them credit for, eh?.
If stocks had come off by the same percentage as gold over the last three days we'd have seen massive intervention.
Coincidence that as soon as JPM's stock price gets hit, so does gold? Just saying...
DavidC
I was just comparing silver prices to JPM charts yesterday...
The moment central banks started to buy gold it was your signal to sell it to them. If You'd ask me, the real big players did just that. Since then gold is under pressure.
I agree.
Further, on a (non) inflation adjusted basis, the gold price has been rising for years, when the usual retail investments (stocks and houses) have been going sideways at best.
Retail will have seen those price graphs, so, by now, there will be lots of participation (via ETF's in their pension schemes).
And what about larger investors in on a levered basis?
Personally, I am curious to see what happens to that huge gold etf that is supposed to hold a bigger position than most central banks...
So much for a safe haven. I would have done better via losses to 0 interest rate/inflation. Oh well. I do like that there's no counter-party risk and any error is my own.
Should have gone long EURCHF around 1.20 at least some pips and intrest rate differential :-)
Goldbugs are in your dome mother fucker. Merry Christmas Rube!
So there is a shortage of dollars at the moment. The biggest debtor (who also controls the printing press) is going to take care of that issue just as soon as everyone is convinced that there is no inflation.
If I believed in conspiracies, I'd say that we are seeing 'market conditioning'.....first the housing numbers are revealed to be far lower than reported for 5 years, next the pm's get taken to the woodshed. The Feds are setting up to run the presses full tilt and are trying to make it appear, beforehand, that there is no inflation. That is their only tool.
The Dollars are horded at the major US banks. This way they own all markets around the world.
if they want the Hang seng up or the dutch AEX they can do it with ease.
As long as the ECB doesn't fund the european banks the same way as the US did the US remains in a monopoly position.
As long as there is no velocity in cash forget the inflation theory.
No velocity in cash assumes that people don't need to eat or pay the bills.
Inflation is in stuff you need. It's the oldest trick in the book and they are playing it well.
Roubini has become a shill, pure and simple...
The Central Banks can not allow a stampede to pms for so many reasons that it is stupid and tedious to renumerate them all each time we have one of these downtrends. The Elites are fighting for a permanent place at the top with little turnover. That is all you have to know.
It is war by other means until real war erupts.
I'll rub it in a bit too.
In the last week GLD 169 to 153. SMDD 18 to 20.50.
EUR/USD going to parity in 2012
Gold going to SPX parity.
I still won't buy it at that level.
May buy DAX at 4,000 with EUR at parity.
Will start buying SPX around 900
hey zh every thing is dollar related not just gold you think the markets just figured out europe is trouble this morning ? i will explain it slowly every one is in tizzy this morning cause ben said no qe yesterday but ben will qe again when will ben qe again ? when he thinks it will do the most good in keeping him from having to go back to nj & obama to the south side
I was lucky. I caught Ag at the lowest point and bought. It started back up immediately. Geez, you gotta keep your eyes on the flippin' charts.... my partner just snagged Au at the dip. Winning... take That, fiat dealers!
I think it's phenominal they link to the oxford study as "proof" that gold is a good hedge against inflation yet page 5 of the study reads:
"The tendency for gold to hold its real terms value over long periods has often led to gold being described as
an „inflation hedge?. However, the reality is more complex as the gold price does not simply move in line with
the general price level but rather exhibits long periods where it moves without any apparent link to inflation
trends."
GOLD BEAR MARKET:
Originally posted Feb 16, 2011
“When DOW/S&P500 correction gathers momentum I expect:
UP ~ USD, various USDXXX currencies, VIX Index
DOWN ~ EURUSD, AUDUSD, NZDUSD, GOLD/SILVER, Base metals
like COPPER etc, CRUDE OIL”
wow hanging on long gold been a bad week
meanwhile in real time FCX rallied back to -1% copper still off 5%+
Declining price of Gold makes the Bugs feel good. They enjoy the pain of falling account values.
The Bugs will be sucking on someone's crank until laid in the grave.
Fuck off troll.
Your blind hatred of those who have declared their independence of the sociopathic financial oligarchy, and your shallow and laughable idiocy, were both abundantly clear by your second post here.
If we have deflation, debt-writeoffs, defaults, etc. then the total asset pie in the world shirinks, and there is less money around to pay $1700 for gold. They cannot print enough to offset the amount of asset (i.e. loans) destruction.
What's goint to stop them from printing? Digital fiat money is quite infinite if you ask me, whereas physical precious metals are not.
The fundamentals are that the EU is drowning and there's no one coming to the resuce. They simply cannot pay their debts in euros, so they will pay them in something else. Plolitical dithering and procrastination has sealed their fate. But that's not all: the entire wolrd is locked in a debt deflation and their central banks have no choice but to fight it with money "printing". No country can afford to go it alone and just let defaltion happen organically, although that is probably the quicker way to a healthy financial system.
Right now liquidity problems in EU banks is forcing them to lease out their only profitable assest: Gold. You also have many hedgies long gold looking at their balance sheet for ANYTHING in the black to sell to cover margin calls, and chase underwater positions. That's even more gold on the market. Supply and demand trump technicals everytime.
Strong buying still coming out of asia, and probably Europe. But physical Gold is still severely under-owned it will take the small number of strong hands awhile to absorb the excess supply. This same thing happened in 2008: liquidity crunch led to Gold selling to raise cash. That was a huge buying opportunity.
But in the end this was never a liquidity crucnh, its a global sovency crunch. It will take awhile before everyone realizes that there is no alternative to global debt repudiation, so the muddle through scenario has some time to run. But the end game is global finacial debt default. The details are unknowable, but what is certain is that in ALL default scenarios Gold will be the ONLY safe haven, and its price will soar because there's only a small amount in desperate hands willing to sell.
BTW: Gold BUgs are the guys that want gold to go to $100,000/oz even though everything else they own goes to zero. That's not a world you will want to live in even if you are a Gold Bug. Gold as a hedge agasinst an obvious tsunami of defaults is a rational wealth preservation strategy. The wrold won't end, but a lot of wealthy people will find out that paper inevitiably seeks its intrinsic value: zero.
"But the end game is global finacial debt default."
But doesn't this mean that the global asset pie will shrink? This means that cash is better than an asset, and as it unfolds, there will be less overall wealth (pie shrinks i.e. deleveraging, writeoffs, etc.) and with less overall wealth, who canpay $2000 for gold?
Roubini is still eating from the through of his friends filled with unlimited fiat money.
He won't give up easily.
Gold bugs will have the last laugh when his economics degree (crap major) and paper dollars are inflated away to worthless while gold bugs are sitting pretty
The big risk of gold is that the BIS tentacles get the world markets in the ultimate death grip. Gold is then priced at whatever they say.
When a week's worth of groceries sells for $15,000, it won't matter if you have paper dollars, M$FT stock or gold - you'd better have lots of flour in the pantry, veggies in the ground, good hunting land and plenty of ammo.
Foolish bitchez...
Has he checked Blythe's festering snatch, or maybe Blankfein's puss-excreting asshole?
Did you sell your silver at 50?
To be fair he has a point, so many were calling for $2000+ gold by the end of 2011, and it looks like its going to fall WELL below the mark.
I expect no higher than $70 oil before QE3 is implemented and that might put the bottom for gold as low as $1250.
So what if gold declines for a couple months, does that make Roubini or any other deflation threat shills right when the over all trend is inflationary?
All of this bearish sentiment is making me incredibly, incredibly bullish.
It's an amazing thing to be able to participate in this once in a lifetime market. We will be telling our grandchildren about this, assuming the world lasts that long.
BTFD.
ROUBINI GUILTY OF SELF-SERVING TIMING
Roubini's calling out of gold bulls makes him just as guilty as crtics that called him out before the market crash in 2009. Until the long-term trend in gold is broken, his criticism is premature and nothing more than link bait.
Said another way, you can't ask Pittsburgh Steeler fans "Where's Your Superbowl Steelers?" in December.
$2,000 gold is yet to be decided. It has neither won, nor lost.
Regards,
George ... The Greek ... From Canada
when the moon comes up i wonder...
where is the sun? oh no! it must be gone.
Well Roub's - if you want to play 'academic' - please inflation adjust gold prices... now suck it!!