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GOLDMAN: Gold Is Going To $1200
TBI ^ | 1-17-2013 | Matthew Boesler

Posted on 01/17/2013 10:52:41 AM PST by blam

GOLDMAN: Gold Is Going To $1200

Matthew Boesler
January 17, 2013

The bank's central thesis is that the U.S. economic recovery finally takes off in 2013, and Goldman expects that to drive a selloff in the gold market as investors rotate away from traditional "safe-haven" investments.

At the time, the analysts wrote, "We lower our 3-, 6- and 12-mo gold price forecasts to $1,825/toz, $1,805/toz and $1,800/toz and introduce a $1,750/toz 2014 forecast. While we see potential for higher gold prices in early 2013, we see growing downside risks."

Now, Goldman has decided to up the ante a bit. Yesterday, its commodity analysts introduced a new call: gold at $1200 per ounce by 2018.

In a note to clients, Goldman analysts Christian Lelong, Max Layton, Damien Courvalin, Jeffrey Currie, and Roger Yuan write, "Assuming a linear increase in US real rates back to 2.0% by 2018, as proxied by the 10-year US TIPS yield, we expect that gold prices will continue to trend lower over the coming five years and introduce our long-term gold price of $1,200/oz from 2018 forward."

What about monetary demand for gold and inflation, though?

The analysts answer that question:

Beyond real interest rates, fluctuations in the monetary demand for gold also exert an influence on gold prices. Our forecast currently embeds physical gold demand from ETFs and central banks growing in 2013 at the 2009-2012 pace, with ETF purchases slowing in 2014. In our forecast, this steady monetary gold demand helps slow the decline in prices over the coming years. Given the risk around this assumption, we also considered alternative paths for physical gold demand but found that, while not negligible, the impact of gold prices to stronger or weaker monetary demand for gold remains modest compared to the influence exerted by real rates

(snip)

(Excerpt) Read more at businessinsider.com ...


TOPICS: News/Current Events
KEYWORDS: economy; gold; goldman; investing; markets

1 posted on 01/17/2013 10:52:46 AM PST by blam
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To: blam

Business Insider is the liberal Democrat version of IBD, right?
Therefore, they cannot be trusted.

Buy gold.


2 posted on 01/17/2013 10:58:39 AM PST by Lancey Howard
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To: blam
'the U.S. economic recovery finally takes off in 2013'

Thanks for the laugh. The world has changed. The chickens are coming home to roost for a while.

3 posted on 01/17/2013 11:01:37 AM PST by Theoria
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To: Jet Jaguar
50 Shocking Questions That You Should Ask To Anyone That Is Not A Prepper Yet
4 posted on 01/17/2013 11:01:59 AM PST by blam
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To: blam

Gee...Goldman wouldn’t have an ulterior motive for this sound advice, would they?


5 posted on 01/17/2013 11:02:24 AM PST by MichaelCorleone (A return to Jesus and prayer in the schools is the only way.)
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To: blam

I don’t suppose crude oil will go to $65 or $70?


6 posted on 01/17/2013 11:02:38 AM PST by stboz
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To: Lancey Howard

7 posted on 01/17/2013 11:04:10 AM PST by blam
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To: MichaelCorleone

Although I see no connection — would lower prices have anything to do with Bundesbank repatriating their Gold from US?


8 posted on 01/17/2013 11:05:55 AM PST by bunster
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To: blam

9 posted on 01/17/2013 11:08:30 AM PST by Zakeet (Democracy is the art and science of running the circus from the monkey cage - Mencken)
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To: Zakeet

The greatest goldbugs: Bush and Obama.


10 posted on 01/17/2013 11:13:20 AM PST by Theoria
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To: blam
bank's central thesis is that the U.S. economic recovery finally takes off in 2013

Well, at least they didn't base their thesis on space aliens.

11 posted on 01/17/2013 11:13:46 AM PST by SampleMan (Feral Humans are the refuse of socialism.)
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To: blam
Good afternoon.

U.S. economic recovery finally takes off in 2013...

Okaaaay...

Beyond real interest rates, fluctuations in the monetary demand for gold also exert an influence on gold prices. Our forecast currently embeds physical gold demand from ETFs and central banks growing in 2013 at the 2009-2012 pace, with ETF purchases slowing in 2014.

Beyond real interest rates? Real interest rates!? What real interest rates? Selling T-bills to the Fed. Yeah, that's the ticket. QE infinity will take care of that, right?

Purchases of real gold slowing in 2014, right? And Germany wants it's gold back?

Okaaay.

I'm going to sue VCU for teaching me macro economics all wrong. My degree is worth poop, apparently.

Bottom line, the Goldman analyst contradicts himself more than 0bama does.

5.56mm

12 posted on 01/17/2013 11:22:01 AM PST by M Kehoe
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To: Theoria

‘the U.S. economic recovery finally takes off in 2013’...?

Bullshit!...unless it’s based on walkers and canes for baby boomers!


13 posted on 01/17/2013 11:26:59 AM PST by AngelesCrestHighway
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To: blam
I believe the strategy is that Goldman will DRIVE the PRICE of GOLD DOWN with strong rumors.

If they are successful in accomplishing that strategy, then they will BUY UP all the available gold and when the SHTF, and gold rises dramatically, they'll be in "high cotton."

14 posted on 01/17/2013 11:30:16 AM PST by VideoDoctor
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To: blam

I’ve seen some folks saying that increased drilling and oil and gas production (Bakken, Eagle Ford, etc etc), done in spite of the current president, is going to drive an economic turn-around which he will take credit for.

While I’ll be glad for any prosperity it will annoy me to see him get the credit. Something like watching him do a photo-op in Cushing taking credit for the Keystone at the same time he was trying to kill the project.


15 posted on 01/17/2013 11:35:39 AM PST by marron
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To: blam

LOL! This is satire, right? If gold goes to $1200, I’ll eat my shorts. But in any case, to all who can afford to buy, BUT IT if it does.


16 posted on 01/17/2013 11:38:39 AM PST by Obama_Is_Sabotaging_America (IMPEACH OBAMA)
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To: blam

I thought Goldman did something like this before. They said that real estate derivatives were the way to go in 2007, meanwhile they shorted them just before the crash.
The dollar and all fiat currencies are the real bubble.


17 posted on 01/17/2013 11:52:12 AM PST by grumpygresh (Democrats delenda est; an EMP confined to DC would be much appreciated)
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To: Obama_Is_Sabotaging_America
LOL is right, with the Fed printing 85 billion in new money every month, the dollar will become so weak that we should get rid of Pennies and Nickles, because no mater what you made them out of, the metal content would be more valuable as a molten slug.
18 posted on 01/17/2013 11:52:12 AM PST by 2001convSVT (Going Galt as fast as I can.)
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To: blam
With a government in place that's printing dollars faster that anyone might imagine, we have a government that can -- using almost worthless dollars -- manipulate markets and come up with a $1200 gold price, and it won't be long after that before gold hits $5000 to $10000 an ounce.

While gold is going down, I'd move my ever more worthless dollars into gold.

Please note that -- soon -- dollars won't be "money."

What, for instance, is a Confederate Dollar really worth today?

19 posted on 01/17/2013 12:12:03 PM PST by OldNavyVet
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To: blam
Video - There Will Be No Economic Recovery
http://www.youtube.com/watch?v=bYkl3XlEneA&feature=player_embedded

20 posted on 01/17/2013 12:16:10 PM PST by preacher (Communism has only killed 100 million people: Let's give it another chance!)
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To: blam

Suuuure I believe this..! Oh man, what a laugh.

You know what the pattern was in the Japanese collapse?

They screamed LOUDER and LOUDER that the retrenchment was OVER as things sank down into Davey Jones’ Locker —more and more shrill, all the time.

I see the same thing happening in the USA, now.

Goldman owned the best information about the bad shape of securitized mortgages EVEN AS THEY SOLD THEM TO OTHERS. And it made sense, since they also SHORTED them, on the other side.

Why would they not do THE SAME to others now, hmmm...?

They’re just acting the same, here —no surprise.


21 posted on 01/17/2013 12:21:56 PM PST by gaijin
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To: gaijin

22 posted on 01/17/2013 12:27:00 PM PST by gaijin
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To: 2001convSVT
Time to buy a wheel barrel. LOL


23 posted on 01/17/2013 12:47:37 PM PST by Obama_Is_Sabotaging_America (IMPEACH OBAMA)
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To: MichaelCorleone

maybe having to come up with 25% of Germany’s gold reserves for repatriation to Frankfurt?

Gee, who didnt see some major gold price manipulation coming?


24 posted on 01/17/2013 1:06:24 PM PST by silverleaf (Age Takes a Toll: Please Have Exact Change)
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To: MichaelCorleone
Gee...Goldman wouldn’t have an ulterior motive for this sound advice, would they?

Heck, GS often takes the opposite sides of trades that they recommend to their clients; imagine how much of a crap they give about feeding the general public misinformation?!?!?

25 posted on 01/17/2013 2:00:32 PM PST by RobertClark (It's 106 miles to Chicago, we got a full tank of gas, half a pack of cigarettes, it's dark and we'r)
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To: VideoDoctor
Don’t believe the scum sucking bastards at Goldman. They are their cronies have played this trick before, trying to push gold down with rumours. These SOBs should have all done a perp walk after the housing derivative crash.
26 posted on 01/17/2013 2:57:36 PM PST by Sam Gamgee (May God have mercy upon my enemies, because I won't. - Patton)
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To: blam
Why? Will our current multilevel mass insanity run its course and fiscal sanity be restored by 2018?

During the last two administrations, the only consistent relationship I've seen with gold is the value of the dollar: the less the dollar is worth, the higher the price of gold.

It may not be very scientific and no doubt there are sound economic reasons (fear being one) for this apparent inversely proportional relationship, but as an informal guide it has been a helpful tool.

27 posted on 01/17/2013 3:26:16 PM PST by GBA (Here in the Matrix, life is but a dream.)
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To: blam

Is this why my small gold mining IRA is going down?


28 posted on 01/17/2013 3:44:55 PM PST by Yehuda
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To: blam

They’re going to keep luring in the suckers, and then pull out the rug....Bet the rent.


29 posted on 01/17/2013 3:46:49 PM PST by dragnet2 (Diversion and evasion are tools of deceit)
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To: Sam Gamgee
Don’t believe the scum sucking bastards at Goldman.

Absolutely!

I wouldn't buy a used car from those SOBs.

30 posted on 01/17/2013 3:48:39 PM PST by dragnet2 (Diversion and evasion are tools of deceit)
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To: blam

Getting ready to start buying gold again!

Can’t see it happening though. There is no recovery, nor is any recovery possible; the now 47 trillion total sovereign debt (and climbing) makes recovery impossible.


31 posted on 01/17/2013 3:54:41 PM PST by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: Zakeet

The overall regression of that line is definitely concave upward.


32 posted on 01/17/2013 3:58:41 PM PST by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: blam
Wow thank goodness the Chinese are buying gold hand over fist otherwise it might go back down to $350.

It's also timely for the Fed as well now they have to stop hypothecating all that gold they have to send back to Frankfurt. Line up all you muppets and get rid of that barbaric relic.

33 posted on 01/17/2013 3:59:54 PM PST by Timocrat (Ingnorantia non excusat)
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To: marron

Sounds like you’ve been suckered by Porter Stansberry.

He’s the quintessential weather vane of investment advisors. One year ago he was preaching mega-doom, and advising moving to 3rd world countries to weather the storm.


34 posted on 01/17/2013 4:07:45 PM PST by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: blam

The cynic in me says Treasury needs lower gold for German repatriation and toadies are paving the way.

The realist in me agrees, it’s pricey, people are tapped and unable to pay the freight to move fuether into PM, they’re having to spend reserves for living expenses. That leaves institutional and sovereign investment. They can move the needle and they’re telegraphing that intent for some odd reason.

And so, back to the cynical, lol.


35 posted on 01/17/2013 4:16:46 PM PST by RegulatorCountry
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To: blam

They didn’t bother mentioning which currency they were referring to with the $1200 prediction. I know it wasn’t the US Dollar (of course), maybe Australia, or New Zealand?


36 posted on 01/17/2013 4:32:16 PM PST by BobL
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