Goldman says $1050 gold

derryb · April 17, 2014 1:17AM

Goldman Stands by $1,050 Gold Target on Outlook for Recovery

However,
Take a look at their track record with gold forecasting

Note in the charts in this link the price of gold in Argentinan and Venezualian currency - a good window into what happens to gold prices when currency is poorly managed. Also note that Goldman has a history of betting against its recommendations. Is this price manipulation?

ricko · April 17, 2014 1:44AM

Well, based on that, I need to stack more gold....

Cheers, RickO

CaptHenway · April 17, 2014 2:03AM

So, does that mean that they are buying?

cohodk · April 17, 2014 2:05AM

Sure glad I live in USA and not Argentina or Venezuela.

jmski52 · April 17, 2014 2:35AM

Let's TRY to dissect this forecast.

Gold will resume a decline as U.S. economic growth accelerates, according to Goldman Sachs Group Inc.

That's their premise?

Bullion’s rally this year was spurred by poor U.S. data probably linked to the weather and rising tension in Ukraine

They contradict themselves in the very next sentence!!!!!!

With the tapering of the Federal Reserve’s bond-buying program, U.S. economic releases will return as the driving force behind lower prices, he wrote.

They assume tapering. What are "economic releases"? What are economic releases? Something we don't know about, again?

Gold’s 12-year bull run ended in 2013 as the Fed prepared to reduce monthly bond-buying that fueled gains in asset prices while failing to stoke inflation.

No mention of the runup in stock prices due to bond-buying, after the bull run in gold prices was over - even as gold demand from China greatly increased during 2012 & 2013.

And inflation is understated as John Williams continues to document. When fuel and food aren't counted in the data, and ipads are - the data really isn't meaningful for most bill-paying Americans. And then, there's "healthcare" costs. I know ours haven't declined.

Prices rose 10 percent this year even as the Fed cut purchases, with Russia’s annexation of Crimea and mixed U.S. economic data boosting haven demand.

Another contradiction. He just got done stating that the bull run ended in 2013. He can't even keep the dates straight in his own analysis. Some analyst! Wanna take his advice?

“It would require a significant sustained slowdown in U.S. growth for us to revisit our expectation for lower gold prices over the next two years,” Currie wrote in the report, dated yesterday. “While further escalation in tensions could support gold prices, we expect a sequential acceleration in both U.S. and Chinese activity, and hence for gold prices to decline.”

Another BS contradiction in two successive sentences! Slowdowns cause lower gold prices! Oh, and economic acceleration causes gold prices to decline!

If anyone actually thinks that this writeup is meant to do anything but confuse the muppets, I beg to differ.

derryb · April 17, 2014 2:35AM

<< Sure glad I live in USA and not Argentina or Venezuela. >>

Yepper, could never happen here. Wonder if the locals there at one time felt the same way.

DrBuster · April 17, 2014 2:51AM

<< 

<< Sure glad I live in USA and not Argentina or Venezuela. >>

Yepper, could never happen here. Wonder if the locals there at one time felt the same way. >>

I/we were talking with some Columbian and Aruba natives last week. They said they wouldn't set foot in Venezuela right now at all. We were debating a quick beach junket down there just so I could set foot on South America since we were off the coast, after talking with our new friends we decided against it. My wife has been there a couple times, but it sounds like she won't be going ever again.

To add: we did go jewelry shopping a bit down in Aruba, deep discounts available for what it's worth on gems and gold.

johnny9434 · April 17, 2014 5:40AM

we shall see. ill be getting more at that rate

BAJJERFAN · April 17, 2014 6:06AM

<< we shall see. ill be getting more at that rate >>

Yep. Could use the chance to dollar cost down on my measly few ounces.

roadrunner · April 17, 2014 6:26AM

Another BS contradiction in two successive sentences! Slowdowns cause lower gold prices! Oh, and economic acceleration causes gold prices to decline!

The US slowdown from 2001-2003 resulted in a 50% rise in gold prices. Silver on the other WAS affected by that slowdown and actually lost value (as seen in the GSR doubling during that period).
The bulk of the 1970's was a US slowdown of sorts. Gold didn't do too bad back then.

The US acceleration from 2004-2008 really put a hurt on gold as it rose from around $400 to $1,000.

It the FED's bond tapering results in lower gold prices, how does one explain the additional tranches of QE from fall 2012-2013 where gold basically crashed?
And during the no QE period of 2003-2008 gold did quite well. The link between gold and QE appears fairly weak. Just as US slowdowns or accelerations aren't the final say in gold prices.

Maybe it would be simpler if the GS analyst just said "it depends."

Baley · April 17, 2014 7:53AM

Yeah, it depends on investor emotions, in the aggregate sloshing of capital around the markets.

derryb · April 17, 2014 10:24AM

<< Another BS contradiction in two successive sentences! Slowdowns cause lower gold prices! Oh, and economic acceleration causes gold prices to decline! >>

It's quite simple - what investors perceive as better alternatives causes gold prices to decline.

Goldman says $1050 gold

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