Skip to comments.GOLDMAN: Gold Is Going To $1200
Posted on 01/17/2013 10:52:41 AM PST by blam
GOLDMAN: Gold Is Going To $1200
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
(Excerpt) Read more at businessinsider.com ...
Business Insider is the liberal Democrat version of IBD, right?
Therefore, they cannot be trusted.
'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.
Gee...Goldman wouldn’t have an ulterior motive for this sound advice, would they?
I don’t suppose crude oil will go to $65 or $70?
Although I see no connection — would lower prices have anything to do with Bundesbank repatriating their Gold from US?
The greatest goldbugs: Bush and Obama.
Well, at least they didn't base their thesis on space aliens.
U.S. economic recovery finally takes off in 2013...
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?
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.
‘the U.S. economic recovery finally takes off in 2013’...?
Bullshit!...unless it’s based on walkers and canes for baby boomers!
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."
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.
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.
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.
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?
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.
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?