Goldman Sachs cuts 12 month gold target to $1390, advises going short.
s4ny
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Goldman Sachs (GS) Wednesday cut its forecast on gold prices for this year, citing the metal's unexpectedly weak performance in the face of heightened euro-zone risks and weaker-than-expected U.S. economic data.
The bank cut its three-month view on gold to $1,530 a troy ounce from $1,615/oz, it also dropped its six-month forecast to $1,490/oz from $1,600/oz and its 12-month gold outlook to $1,390/oz from $1,550/oz.
At the end of 2013, Goldman Sachs sees gold trading at $1,450/oz, compared with $1,600/oz previous forecast. At year-end 2014, it sees gold trading at $1,270/oz, down from a previous forecast of $1,450/oz.
"Despite resurgence in euro-area risk aversion and disappointing U.S. economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning," Goldman Sachs said.
"Given gold's recent lackluster price action and our economists' expectation for higher U.S. real rates, we are lowering our USD-denominated gold price forecast once again," it added.
The bank also recommended closing the long Comex position on gold it first initiated in October 2010, and instead opening a short position against the metal.
The bank cut its three-month view on gold to $1,530 a troy ounce from $1,615/oz, it also dropped its six-month forecast to $1,490/oz from $1,600/oz and its 12-month gold outlook to $1,390/oz from $1,550/oz.
At the end of 2013, Goldman Sachs sees gold trading at $1,450/oz, compared with $1,600/oz previous forecast. At year-end 2014, it sees gold trading at $1,270/oz, down from a previous forecast of $1,450/oz.
"Despite resurgence in euro-area risk aversion and disappointing U.S. economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning," Goldman Sachs said.
"Given gold's recent lackluster price action and our economists' expectation for higher U.S. real rates, we are lowering our USD-denominated gold price forecast once again," it added.
The bank also recommended closing the long Comex position on gold it first initiated in October 2010, and instead opening a short position against the metal.
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I knew it would happen.
With two major averages hitting all time highs today and this short recommendation there seems to be smoe opportunities here for the salient and/or risk-on type peeps(?) Unfortunately I'm not either one of them right now.
I'm frying other fish these days.
This is how gold hoards are formed.
I knew it would happen.
<< <i>Listening to CNBC, practically *EVERYONE* is recommending to short gold now!!
This is how gold hoards are formed.
or money lost...gold down $25 as I type.
BTD.
frontrunning is sweet unless you are one of these guys
And I'll take a drop so I can upsize my 6 continent gold set cheaper!
30 yr auction is over tomorrow at 1 pm so the dogs should be back in the pen by then. Goldman jumped on the bandwagon with everyone else in posting their forecast.
It seems that for the past 1-2 yrs nearly all of the quick hits to gold coincide with treasury auction days, FOMC meetings, or Option's Expiration weeks.
<< <i>Only the really dumb money would follow through on a call like that. >>
Agreed. But there are also a lot of those in the market. I don't mind one bit if they push the spot prices down temporarily. I'll speed up my buying of gold at the same time that the big bankers do.