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 ...
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.
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?
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?!?!?
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.
They’re going to keep luring in the suckers, and then pull out the rug....Bet the rent.
Absolutely!
I wouldn't buy a used car from those SOBs.
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.
The overall regression of that line is definitely concave upward.
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.
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.
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.
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?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.