Posted on 05/13/2010 5:40:40 AM PDT by blam
JP Morgan: Gold Could Now Face 'Unlimited' Demand
Vincent Fernando, CFA
May. 13, 2010, 6:42 AM
JP Morgan's John Bridges believes the latest breakout for gold was a huge positive sign for the metal.
Euro weakness fears, coupled with dollar weakness fears, could lead to an enormous amount of demand:
JP Morgan:
A German banker once told us that gold normally trades like a commodity. However, when investors lose confidence in currencies, because the pool of gold is so much smaller than the pool of currencies, demand for gold can effectively become unlimited. We believe the European version of “QE” is generating serious currency worries and led today to the breakout of the gold price above the previous intraday high at $1,226/oz.
We see this breakout as significant: The market might have welcomed the European’s latest solution to the Greek crisis with a weaker gold price. If the gold price had fallen, bears could have pointed to a “double top” in the chart, and this could have contributed to a period of weakness for the metal.
They're recommending exposure both through gold and gold-related stocks, as insurance, since despite the fact that gold is a record price levels, they believe that it could feasibly go far higher. Guessing just how wild investors will get for an asset is still a horribly tricky game nonetheless.
Don't miss: 15 countries making a fortune on surging gold >
[snip]
(Excerpt) Read more at businessinsider.com ...
JP morgan must have lots of gold they want to sell.
Translation: JP Morgan looking for buyers—profit-taking time.
You beat me to it.
We heard the same thing in summer 2008 at the top of the oil market.
And if they’re selling they either:
1. Really need the money
2. Think Gold has or is about to peak at least for the time being
Wonder if this will be tacked to the dry erase board at my coin dealers’ store today. meh
:(
Gold thrives on bad news. How much bad news do you think awaits us?
Another thought. As the “Buy Gold” adds reach their shrillest you know a market peak is being reached. (Keep an eye on these and you get to make use of millions in market research for free.)When the bar flies start to tell you that investing in metals is a great use of your money, then get out of the gold market without delay.
The market internals look very positive for gold.
Lots of strong buying.
Those who were short gold got out of their positions several weeks ago.
GLD is very positive. Huge accumulations these past 10 days.
If anyone is thinking about shorting gold, you may want to reconsider. Gold may want to see what $1300 looks like before we get any sort of correction.
Signs of a peak in gold prices:
1. When the taxi cab drivers start talking to you about it, uprompted.
2. same with the paperboys and shoe shiners
3. Gold makes the cover of Time magazine.
Until then, Gold.
“Gold thrives on bad news. How much bad news do you think awaits us?”
I’m glad you asked. The guys from Ghostbusters summed it up best:
“This city is headed for a disaster of biblical proportions.
Mayor: What do you mean, “biblical”?
Dr Ray Stantz: What he means is Old Testament, Mr. Mayor, real wrath of God type stuff.
Dr. Peter Venkman: Exactly.
Dr Ray Stantz: Fire and brimstone coming down from the skies! Rivers and seas boiling!
Dr. Egon Spengler: Forty years of darkness! Earthquakes, volcanoes...
Winston Zeddemore: The dead rising from the grave!
Dr. Peter Venkman: Human sacrifice, dogs and cats living together... mass hysteria!”
Goldbug ping
Uh oh!
I’m on record as saying silver gets to $20.32 on this run, but this JPM hyperbole might be kicking the legs out from under that.
Mail me to get on or off the Free Republic Goldbug Ping List.
I know a uber wealthy guy( multiple jets, homes, business all over the world) so I ask him about all this mess. I ask him what his lifeboat is. He tells me he been taking physical possession of gold for two years now, and buying Canadian wheat farms on the assumption of economic disruption of the uber basic real real must have market....ie, food.
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