Goldman Tells Clients To Buy COMEX Gold At $1,364.2, Raises 12 Month Gold Forecast From $1,365 To $1,650, Silver To $27.60

Tyler Durden's picture Submitted by Tyler Durden on 10/12/2010 08:39 -0500

Central BanksCopperCrudeExchange Traded FundFederal ReserveMonetary PolicyPrecious MetalsQuantitative EasingReal Interest Ratesrecovery

Alarm bells are ringing everywhere as Goldman (which joins UniCredit in boosting its gold price target) may have just picked the short-term top in gold, after it revised its 12 month target from $1,365 to $1,650. And while David Greely’s track record is nowhere near as atrocious as that of Goldman’s FX team which manages to top tick the EURUSD every single time, the fact that Goldman is now opening Long Gold recommendations (to go with its current trading recommendations of long Corn, Copper, Platinum and WTI) is reason for big worry. Recall which bank was getting its clients to go all in in crude 2008 when oil was $140+. We would be very cautious when Goldman is on “your” side of the trade. Nonetheless, the firm is pretty much spot on “We believe that a return to quantitative easing will act as a strong catalyst to carry gold prices to even higher levels.”

Here is Goldman’s full revised target. Compare this to the most recent 12 month gold target by Greenlaw from August of $1,365.

And here is Goldman’s extended thesis on gold, which is a simple one, and fundamentally identical to what we have been saying for years: buy gold until the Fed begins to tighten. Which means forever and never.

Gold rally to continue, for an extended period

Gold prices have rallied strongly since early August. The rally began as net speculative long positions rebounded from what we argued were oversold levels (see Precious Metals Update: Gold market poised for a rally as US real rates head lower, August 11, 2010). The initial rebound, however, extended into a new rally as 10-year US TIPS yields plummeted with the growing prospect of another round of quantitative easing by the US Federal Reserve, sending the price of gold through our $1,300/toz 6-month price target and to new record nominal highs above $1,350/toz, just shy of our $1,365/toz 12-month target (Exhibit 1).

US real interest rates have fallen with the slowdown in the pace of the US economic recovery and the growing prospect of another round of quantitative easing. With TIPS yields now closer to 0.50% then the 1.00% embedded in our prior forecast, we expect gold prices to continue to climb (Exhibit 2). Despite the rebound in net speculative length, it remains well-below levels consistent with the current low US real interest rate environment.

We expect positions to continue to climb with quantitative easing a catalyst to lift positions and prices higher. Accordingly, we are now raising our gold price forecasts to $1,400/toz, $1,525/toz, and $1,650/toz on a 3, 6, and 12 month horizon, respectively. This raises our 2011 average gold price forecast to $1,575/toz, $175/toz higher than previously. We are also opening a trading recommendation for a long position in the Dec-11 COMEX Gold contract.

While we view the level of US real interest rates as the primary driver of gold prices in the current environment, stronger monetary demand for gold from both gold-ETFs and central banks than we currently expect creates upside risk to our gold forecast. In particular, gold- ETF holdings have been quite stable in recent months, suggesting that gold prices could move even faster to our year-end target should ETF buying return following the new record highs in gold prices and the announcement of quantitative easing, which our US economics team expects to occur as early as the November FOMC meeting.

Speculative positions rebound from oversold levels, but continue to chase falling US real interest rates

Gold prices have rallied strongly since early August, trading through our 6-month $1,300/toz price target and setting new nominal highs above $1,350/toz. The first leg of this rally took place in August with prices returning to their June $1,260/toz highs on the back of a strong recovery in COMEX net speculative length from what we argued were oversold levels (see Precious Metals Update: Gold market poised for a rally as US real rates head lower, August 11, 2010). Speculative long positions tend to move inversely with US real interest rates (see Exhibit 3), with more speculative length translating lower US real interest rates into higher gold prices. As of early August however, there had been a large disconnect between the light COMEX net speculative positioning and low US real rates.

Specifically, net speculative length had declined to near year-to-date lows just as US real rates, as measured by the 10-year US TIPS, dropped to a decade low 1% (Exhibit 4). As we argued then, the real rate to net speculative positioning relationship suggested that a correction would increase net speculative length by 9 million toz. This move has mostly taken place.

However, even as speculative longs were moving back in line with low US real interest rates, US real interest rates began to plummet with the growing prospect of another round of quantitative easing by the US Federal Reserve. After gold prices stalled at their June highs, the break to the upside came on September 13 amid a heightened market focus on the potential for a return to quantitative easing, with US 10-year Treasury and TIPS yields falling, and the US dollar declining against the euro. Gold prices were further propelled to their current new highs after the US Federal Reserve signaled in the September FOMC statement that it was willing to ease further. However, as US real interest rates have fallen, the increased in net speculative length in COMEX gold futures has lagged behind, and is well-below levels consistent with the current low real rate environment, pointing to further upside to gold prices.

Specifically, the recent real rate to net speculative positioning relationship would suggest that the current 0.50% US 10-yr TIPS yield should push net speculative length to a record 37 million toz. Historically, a 1 million toz increase in COMEX gold futures long positions translates into a 0.87% near-term increase in gold price (see our report Commodities: Frameworks: Forecasting gold as a commodity, March 25, 2009 for details). This implies that this 7 million toz increase from last Wednesday levels would point to a 6.1% rally in gold prices, all else constant, taking current prices to new highs of $1,425/toz, pointing to further near-term support to gold prices (Exhibit 5).

While the recent decline in US real rates suggests further upside to gold prices in the near term, our US economic outlooks suggests that US real interest rates will stay lower for longer and support a continuing rally in gold prices.

Our US economic outlook suggests US real interest rates will stay lower for longer with renewed quantitative easing an effective catalyst to carry gold prices higher We had previously based our outlook for gold prices on the expectation that US real rates would remain in a 1% to 1.5% range; however, the recent deterioration in the US economic outlook and the prospect for renewed quantitative easing has brought 10-year TIPS yields below 0.50%. Our US economist and fixed income strategist outlooks suggest that these levels are sustainable and we expect this to support COMEX gold net spec positions at significantly higher levels and in turn push USD-denominated gold prices significantly higher.

Specifically, the key driver of the sharp decline in US real rates has first been the re-pricing lower of US growth expectations as the economic recovery has lost a considerable amount of its momentum. Our US economists forecast the significant slowing in US growth in 2H10 to extend in 2011 and, in turn, our fixed income analysts see 2.50%-2.75% as the new likely yield range for 10-year US Treasuries into 2011. Our US economics team also expects that the Fed will return to quantitative easing measures with purchases of US Treasury securities of $1 trillion which in turn should likely keep US bond yields depressed. They further expect that such a program will be announced at the November 2-3 FOMC meeting. The growing likelihood of such a move has been the key catalyst to push US real rates sharply lower since early September. We believe that a return to quantitative easing will act as a strong catalyst to carry gold prices to even higher levels.

These outlooks suggest that the current low US real rate environment will persist and in turn support gold price. At current US TIPS yields of 0.50% and in the absence of net buying or selling from gold-ETFs and central banks, our gold framework points to average gold prices of $1,600/toz (see Exhibit 6). We expect further monetary demand for gold and are accordingly raising our COMEX gold price forecast higher to $1,400/toz, $1,525/toz, and $1,650/toz on a 3, 6, and 12 month horizon, from $1,260/toz, $1,300/toz and $1,365/toz respectively. Our updated forecast points to a $1,575/toz average price in 2011, $175/toz higher than we previously expected. We are also opening a trading recommendation for a long position in the Dec-11 COMEX Gold contract.

Longer term, we continue to expect that prices will come under downward pressure once the US economy strengthens and the US Federal Reserve begins to tighten monetary policy. As discussed by our US economists, models suggest that it might in fact take until 2015 or longer before a rate hike became appropriate although they emphasize that this is a scenario, not a formal forecast (see US Views: Sealing the Case, October 11, 2010). While they do not expect tightening to happen before 2012 at the earliest, we view an earlier than- expected tightening of US monetary policy as the primary downside risk to our gold price forecasts. Specifically, our modeling of gold prices against real rates suggests that a recovery of US real rates to 1.5% would bring gold prices down to $1,220/toz over the medium term.

 

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by Cookie
on Tue, 10/12/2010 – 08:43
#642904

Haha…buy Comex!!!

Login or register to post comments by perchprism
on Tue, 10/12/2010 – 10:38
#643269

 

This comes just as the Vice Chair of the Fed lowers expections of QE2:

http://news.yahoo.com/s/ap/20101012/ap_on_bi_ge/world_markets_12

Login or register to post comments by midtowng
on Tue, 10/12/2010 – 12:28
#643600

I remember an article from several years ago. It pointed out that the best time to buy gold is when real interest rates turn negative. I believe that is where TIPS are currently.

Login or register to post comments by dlmaniac
on Tue, 10/12/2010 – 11:32
#643427

hmmm, 1650. Did they copy it from Jim Sinclair?

Login or register to post comments by Thunder Dome
on Tue, 10/12/2010 – 11:41
#643453

No, Goldman bets big using Armstrong’s numbers.  Next May, market is in for horror show.

Login or register to post comments by Turd Ferguson
on Tue, 10/12/2010 – 12:08
#643541

Just for fun…here’s another top-caller who has been left for dead. Btw, what kind of idiot calls for a “triple top”? There is no such recognized technical formation. Note the date, too:

http://www.minyanville.com/businessmarkets/articles/precious-metals-prec…

Login or register to post comments by trip nixon
on Tue, 10/12/2010 – 08:43
#642905

short gold

Login or register to post comments by ssp2s
on Tue, 10/12/2010 – 09:10
#642987

Afraid so.  Or at least go neutral.

This tells me that QE2 may not be a done deal.

Login or register to post comments by LowProfile
on Tue, 10/12/2010 – 10:22
#643211

Agreed.

I think this is a pump for paper gold, prior to a dump of paper gold and equities.

This does two things, it gives Wall St. Corp yet another chance to suck even more money out of the middle class, and will drive many into bonds (the last bubble).

My analyisis puts gold at $1264.00 on a pullback.

Buy physical with both hands once it hits.

Login or register to post comments by tmosley
on Tue, 10/12/2010 – 09:18
#643006

Short COMEX and/or GLD, long physical gold.

Hedged bet on default.  

Login or register to post comments by e_goldstein
on Tue, 10/12/2010 – 09:30
#643041

short paper gold, or as I like to refer to it: “gold.”

Login or register to post comments by Turd Ferguson
on Tue, 10/12/2010 – 09:44
#643070

I may be “whistling past the graveyard” but GS may not have any luck top-calling gold at this moment in time.

Recall that on Thursday of last week, the Evil Empire succeeded in painting the tape with an outside downward reversal day. This is significant if gold either moves through and/or closes below the low of that day which was 1326. They have tried twice to get the avalanche rolling, the latest being overnight last night. By the way, if anyone still doubts the malicious presence of the EE, see the price action since 6:00 EDT yesterday for proof. (The EE tried to jam it down Sunday night before taking Monday off. Gold rallies all day Monday. As soon as gold re-opens at 6:00, down she goes.)

At any rate, our new best friends, the buyer(s) of size, continue to appear and buy dips at what appear to be pre-determined levels. Yesterday was 1335. Today was 1340. You can plainly see it on the chart. This has to be seriously pissing off the EE. Never, ever have they been unable to control the gold market in the past. Never. Yet now, they seem to have met their match in a determined group of buyers who are calling their paper bluff. Truly an amazing thing to behold.

OK, what’s next? If the EE can succeed in driving price down through the lows of last Thursday, they will generate more selling from weak-handed, momentum-based longs. Expect 1275-80 by late week or early next week. The EE will, most likely, not be able to accomplish this without the cooperation of a dollar rally so, amazingly, this is not the most likely scenario. Instead and conversely, if gold can trade up through the highs of last Thursday at 1366, it will have begun to negate the outside reversal day damage. If/when gold closes above 1366, we will be off to the race once again with 1400 squarely in our sights.

The key to this may, in fact, be silver. As I’ve mentioned (ad nauseam?) for some time now, the silver Comex appears to be in serious crisis. Silver has rallied from 18 to 23 over the past 6 weeks and it is bringing gold along with it because “if the silver Comex is out of gold, the gold Comex must be a charade, too”. The weekly close, back on Friday, above 23 is extremely bullish. On the chart, there is nothing overhead until $35 or so. We may see silver rapidly accelerate to the upside in the coming weeks. If so, no amount of EE price-capping will be able to contain gold.

Again (ad nauseam), I’ve maintained for months that gold would trade at 1350 by Halloween and 1500 by 12/10/10. Nothing, so far, has caused me to change my mind.

Login or register to post comments by LowProfile
on Tue, 10/12/2010 – 10:24
#643222

We already hit $1350.  I’m expecting a pullback to $1264.  Buy with both hands when it hits.

Login or register to post comments by SwapThis
on Tue, 10/12/2010 – 10:38
#643266

well said Turd.  It may be that EE will use INTC & JPM earnings spin as a good inflection point to try to ‘risk off’ the market, at least temporarily. If Jamie doesn’t have a good answer to the foreclosure flap all the Big Cap banks could founder on tomorrows JPM conference call word as has happened in the past.  Also, INTC tends to sell off post earnings, which they have pre-announced would be soft.  Also the DXY is stronger today which may be the EE beginning to apply the brakes….for now.

Login or register to post comments by Slewburger
on Tue, 10/12/2010 – 11:08
#643349

Is GS trying to pull money into the CMX silver before they know it will pop?

The shorts have been unwinding and covering since the Maguire scandal, so what gives? The paper fraud probably won’t be covered by the MSM and it will happen after the PM bubble bursts.

Login or register to post comments by SRV – ES339
on Tue, 10/12/2010 – 12:45
#643651

EE… love the handle Turd!

I’m with you on the EE / market struggles… with the market seeming to get the upper hand since the Maguire revelations (funny how cold that story got… not a word since May… I guess Andrew decided to continue breathing for a few more years) 

Question… do you see any tie to pre T-Bill auction activity (raid gold price to drive funds into bonds… of course, stocks get choppy as well, but that’s just hitting HAL’s sell button a few hours a day)? Example… the last few days gold price activity prior to this weeks auctions.

Login or register to post comments by Turd Ferguson
on Tue, 10/12/2010 – 14:24
#643986

Interesting thought, SRV.

If you pull up a chart of gold dating back to the end of the most recent correction in July, you’ll plainly see that about 80% of the $200 or so gain since can be attributed to price action on Mondays and Tuesdays. I find this somewhat strange and I can’t seem to get a handle as to why this is occurring. Maybe later week auctions are soaking up $? I dunno. Have to look into that one.

Login or register to post comments by beastie
on Tue, 10/12/2010 – 08:44
#642906

Aw crap! price will collapse tomorrow.

 

Login or register to post comments by umop episdn
on Tue, 10/12/2010 – 09:14
#642996

I’m thinking along these lines too. Glodman gets it’s customers to buy, then massive short selling of paper gold by Glodman’s friends takes the price down, which causes some to sell. Then the squid buys back the paper (and the physical if they can) and the price of Au and Ag continue to climb.

Login or register to post comments by Internet Tough Guy
on Tue, 10/12/2010 – 08:47
#642916

A disgusting tentacular display. This cephalopod speaks with forked beak.

Login or register to post comments by French Frog
on Tue, 10/12/2010 – 08:55
#642943

when qe2 fails to materialise as much as expected and the price goes down, gs can just blame it on the fed

Login or register to post comments by ATG
on Tue, 10/12/2010 – 09:19
#643011

Bingo.

Wasn’t GS propping $300 oil in 2008?

Login or register to post comments by mrgneiss
on Tue, 10/12/2010 – 08:49
#642921

They’re also urging miners to hedge for 2012.  Isn’t that kind of them.  I guess 2012 is when PM’s go parabolic.

Login or register to post comments by Silverhog
on Tue, 10/12/2010 – 08:49
#642922

Buy Comex? Yeah if they have a physical shop.  I don’t think so

Login or register to post comments by scratch_and_sniff
on Tue, 10/12/2010 – 08:49
#642924

i’m still not 100% sure that the dredful reserve will go all-in, this could drag on for ages…i’m not holding any gold at the minute, so on the fence with respect to the bling. Its broken my heart to be honest.

Login or register to post comments by firstdivision
on Tue, 10/12/2010 – 08:49
#642925

Time to short it once Goldman raises their price target.  “Goldman, the best contrarian indicator money can buy”.

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 08:59
#642962

…but this time its different. Hahaha, I know…. but trying to figure if Lloyd is pulling a Bennie is tricky stuff. Head fake? This is akin to a really bad made for TV whodunnit. What if GS knows gold is about to shoot for the moon and needs to say it told the clients and the White House? Does anyone still work at the White House?

 

Login or register to post comments by gmrpeabody
on Tue, 10/12/2010 – 09:08
#642979

Agreed, this is win-win for GS.

Look, we gave our customers a heads up. We can’t help it that the FED failed on their end.

Login or register to post comments by DosZap
on Tue, 10/12/2010 – 09:29
#643037

No just wait staff, the only one’s working at the WH is PoUS, and he works for the Big 4 Banks.

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 09:35
#643056

Right? Can you see Michelle O, plopped on the floor, counting the silver after summers and rahm left?

Login or register to post comments by Bruce Krasting
on Tue, 10/12/2010 – 08:52
#642935

Who knows where gold will be in a year? I could give you a scenario that it could be $5,000. I could also make you a case for 800.

I think GS is on the right track. A year from now gold will be higher. But it sure scares me when these guys are the ones pushing the “buy” talk. They ALWAYS have an axe to grind….

Login or register to post comments by tmosley
on Tue, 10/12/2010 – 09:20
#643012

I can make a case for Gold $800.  The Fed calls the currency and reissues one with three zeros chopped off.

Login or register to post comments by DosZap
on Tue, 10/12/2010 – 09:33
#643052

Bruce,

They are close to Jim Sinclair, he has a million dollar bet it hit’s $1650.00 by Jan 2011.

Which I am sure you know about.

How do you make a case for $800.00 in a year, with what we have coming at us, with no way to derail it?.

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 11:42
#643457

he doesn’t ‘have a bet’   he has a publicity stunt.

as soon as anyone steps up to take the other side he will come up with a million excuses why he can’t do it.

 

Login or register to post comments by Ace Ventura
on Tue, 10/12/2010 – 12:05
#643539

I may be misinformed, but I seem to recall the bet has indeed been formally taken? Supposedly some hedge fund agreed to the terms and the wager funds are being held by a third party.

I’m not 100% positive, but maybe some of the diehard Sinclair readers might have official info on this?

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 12:21
#643583

hey you could be right, i said somewhere else here that every trader in the world would take him up on the offer.

here’s my bet:

They can’t come to terms, and it will be Sinclair that walks away.

Second bet: The hedge fund does not lose money, even if the prediction is correct, (unless Sinclair welches on the bet of course.)

 

Login or register to post comments by trillion_dollar…
on Tue, 10/12/2010 – 08:53
#642936

If they can forecast ZIRP to 2015, then where’s the forecast for gold in 2015?

Login or register to post comments by rolo
on Tue, 10/12/2010 – 08:54
#642940

Typical – just when i thought we might get a nice move, GS and the rest of the banks start upgrading their price targets!

Oh well, I guess there is the possibility that they might actually be correct this time.

Login or register to post comments by system failure
on Tue, 10/12/2010 – 08:54
#642941

Keep your physical gold and silver and sell any and all paper gold and silver now is the correct interpretation of GOLDMAN SUCKS conviction buy!!!!!!!!

Login or register to post comments by Commander Cody
on Tue, 10/12/2010 – 08:55
#642942

GS contrarian.

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 08:56
#642945

but i thought GS was part of the giant conspiracy?

You know, the one to manipulate gold prices lower to protect somebody’s short position (why they wouldn’t just cover it is beyond me, that would be a lot easier).

Damn, now I have to rethink everything! Just when I thought the giant squid was running everything.

Login or register to post comments by system failure
on Tue, 10/12/2010 – 08:57
#642955

JPM Chase took over Bear Sterns GOLD/SILVER manipulation, Goldman Sucks just front runs the work of JPM/Fed.

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 09:26
#643025

ooohhh   so JPM is behind everything? Now I get it.

But didn’t GS get the memo from JPM and the fed?

I thought all the CBrs were GS alumni?

And why doesn’t JPM just cover their short position, it’d be so easy, I mean it can’t be very big as gold is so under-owned  right?

 

Login or register to post comments by TheGreatPonzi
on Tue, 10/12/2010 – 09:02
#642969

Shut the fuck up, idiot.

Login or register to post comments by lsbumblebee
on Tue, 10/12/2010 – 08:56
#642947

“And don’t forget everybody…make sure you buy paper gold.”

-David Greely

Login or register to post comments by CashCowEquity
on Tue, 10/12/2010 – 08:57
#642952

Goldman is for fruits. BOHICA !

 

Gold wins !!!

SIlver not bad either !!!

 

I own both PHYSICALLY !!!, Woo HOO Bitchez !!

Login or register to post comments by ArrestBobRubin
on Tue, 10/12/2010 – 09:04
#642959

Hey, even a broken clock is right twice a day… But I do think the squid has this one right. They are in very good company in making this call but are playing it on the conservative side compared to many other price targets.

 

Login or register to post comments by Alex Lionson
on Tue, 10/12/2010 – 09:01
#642966

Would be nice to hear what JPM or HSBC are saying in this regard

Login or register to post comments by Ripped Chunk
on Tue, 10/12/2010 – 09:27
#643029

GS discussed it with them over the weekend.

Login or register to post comments by johngaltfla
on Tue, 10/12/2010 – 09:06
#642976

Which means that you shouldn’t buy until the correction hits $1120 to $1180 and only buy for delivery, not paper. However shorting it looks pretty good in this area.

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 09:11
#642988

But John dear, what if you wait for $1180 and there is no physical available?

Login or register to post comments by johngaltfla
on Tue, 10/12/2010 – 09:17
#643000

There’s always one desperate sucker. Usually the same ones that said Bear Stearns is a hold but bought gold on the QT. Panic stricken people during a correction do stupid things. It’s fun to watch and profit from them.

Login or register to post comments by tmosley
on Tue, 10/12/2010 – 09:27
#643032

One desperate sucker for 10,000 hungry sharks.

Good luck getting the gold.  It probably ain’t gonna happen, unless you made some kind of arrangement beforehand.

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 09:31
#643044

Considering I know whats probably sitting on your desk right now, I am surprised you are not compassionate. Even Hannibal Lecter was touched by the silence of the lambs. It isn’t fun to watch the panic, its so sad. What a waste of human potential out there.

And who wants to hunt down suckers to obtain PMs? So far all physical deliveries work like the stupid pet-med commercials. Just order online and bars magically appear at my door, same week. Either the postman is flirting with me or he knows what he’s handing me. Not sure whether to be flattered or well armed.

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 09:31
#643048

But John dear, what if you wait for $1180 and there is no physical available?

typical realtard tactic: “They aren’t making any more land you know? You’ll be priced out of the market if you wait”

And there are always suckers who believe it.

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 09:40
#643065

Not sure what a realtard is, but I’ve continually bought land and PMs over time and its working out really well on both. Does someone need a hug?

Login or register to post comments by CrockettAlmanac.com
on Tue, 10/12/2010 – 10:39
#643270

Dagney had offered a hug,

To clunky VWBug.

He couldn’t be held,

By promise of geld,

Which simply caused Atlas to shrug.

 

 

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 11:09
#643347

realtard is the name given by zhrs to RE agents who would sell their gramma for a nickel and come up with the same old scare tactics for why people should buy right now, such as the one you mentioned.

Hugs are always welcomed, if you’re hot and in lima peru or cusco give me a call!

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 11:21
#643389

I’m hot, but let us not “get off” topic. Are you saying that you are pretty sure the retail gold sellers will have plenty of available bars for the foreseeable future? Even though a mad man is crashing our currency? With a debt of $70Trillion, unfunded liabilities and agency toxicity, QE2 all in, you can’t see a shortage as a distinct possibility? Just because every fiat currency ever has collapsed, usually with a reversion to PMs as new money base, and just because the US dollar is 94% down the toilet, that because it used to be “the” world reserve currency, that its all good, dog?

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 12:10
#643552

thinking about your hotness i forgot to answer your questions.

No, I don’t think it’s all good. Put me in the Marc Faber camp.

Shortage of physical? Possible, but I very much doubt it. I was around when gold/silver  hit the real highs and although for a while there were line ups at the bank to buy physical, everyone got all they needed and a few short months later they were desperate to sell it.

Meanwhile, the smart money, otherwise known as peasants in India melted all their hoards of silver and drowned the poor Hunt brothers in a river of physical supply they never even thought about.

Oh, but I forgot, this time it’s different : )

 

 

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 13:08
#643663

funny, i just picked up a copy of ‘el comercio’ here and they have a BIG article on gold production rising 3% this year, and talking about how the high price is making all kinds of previously uneconomical mines profitable.

It’s titled ‘las mineras mueven cielo y tierra para hallar oro en areas remotas’.

See? Markets work. High prices increase supply which eventually brings back equilibrium.

Login or register to post comments by tmosley
on Tue, 10/12/2010 – 14:11
#643936

*looks for 20% interest rates*

You’re right, by golly.  No 20% interest rates!  No way to stop the dollar collapse this time!

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 11:17
#643373

Hey Dagny if you ever need any physical, just ask me, I have a whole list of zh’rs who brag about having physical in their possession, lots of it!

In fact, you could probably just dig up any backyard in florida and find the stash by the sounds of it.

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 11:25
#643401

Well Bug, that would be stealing. Its creepy that you have a “list” of ZHers. But what kills me is the memo you missed. Most who have physical have ammo as well. I’m just a 110 lb. girl, but even I have a glock 26 snug, under my sweater.

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 12:24
#643497

well now you’re starting to sound hot, but i still have my doubts.

you people take things far too literally.

I like making fun of people who say we are going mad max and that we all needs guns, ammo and a bomb shelter, and then they tell the WHOLE WORLD they have a stash of PMs.

Too funny.

Like the guys who would take your stash are unarmed, lol. Did they even see the mad max movies??

Anyway, back to gold, I do think the dollar is doomed, and gold will go much higher, eventually.

I just think the timing is off. Not going to happen yet, and we could see a major correction first.

If not, no biggie, I am not afraid of my neighbours and would hate to have to shoot Mrs. Bartz anyway, she makes the best carrot cake ever.

BTW, I bet I was attending objectivism lectures while you were still a gleam in daddy’s eyes. Not a judgement, just saying I am not unfamiliar with austrian economics.

But you know, Ayn Rand preached REASON, and a lot of the crap I read on here is just so far from reality it’s funny, so I enjoy pointing that out.

What can I say, I’m retired and not a big fan of TV.

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 13:35
#643793

But we’re all using “other” names here. Are you assuming that if a person has said they have a PM stash here on ZH, that the criminals who would steal it can find us for real? Or do you assume if they’d blab it here, they probably broadcast to actual people/sheep?

Login or register to post comments by Meatier Shower
on Tue, 10/12/2010 – 13:03
#643655

Is that why one boob looks funny?

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 13:32
#643780

You noticed that too? They never appeared off til I started to carry. Fortunately, I am naturally well endowed enough to pull it off. If the other side of the holster needs more weight than a few extra clips, I can always shove some gold bars in the pouches. …talk about the scales of justice…

Login or register to post comments by macktheknife
on Tue, 10/12/2010 – 14:43
#644066

Everyone in my town knows I own gold – they ask – is it buried in your backyard?  I tell them, yes it is –  you can find it right under the three landmines I buried on top of it.

They usually get nervously silent after that.  You are kidding,right?        Kinda funny.

Login or register to post comments by Martel
on Tue, 10/12/2010 – 09:09
#642981

This isn’t going to help Jim Sinclair at all. http://goldprice.org/gold-news/2008/04/jim-sinclair-bets-million-dollars…

Login or register to post comments by oddjob
on Tue, 10/12/2010 – 09:39
#643063

I doubt ‘Big Jim’ is worried.

Login or register to post comments by Turd Ferguson
on Tue, 10/12/2010 – 09:47
#643089

Trust me, he’s not.

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 11:23
#643395

what a pathetic publicity stunt.

I mean, gold will go a lot higher than $1650, although I don’t think it will happen so soon.

But anyone can see if he was even half serious he would buy some calls and make far better than 100% if he’s right.

I imagine every trader in the world would take him up on his offer if he had any credibility, which he won’t have after this gets around.

Login or register to post comments by Turd Ferguson
on Tue, 10/12/2010 – 14:28
#644006

“But anyone can see if he was even half serious he would buy some calls and make far better than 100% if he’s right.”

Sorry, bug, but I’ve got to respond to your ridiculously myopic “point”. Between his physical holdings and the millions of shares of TRE that Sinclair owns, he probably feels adequately leveraged to the price of gold such that he does not need to add “some calls”. Sheesh. 

Login or register to post comments by Rantor
on Tue, 10/12/2010 – 09:09
#642982

Yup,  GOldman Sachs, we were already supposed to have $200 Oil and $2000 Gold.  I have safely bet against their public pronouncements. 

Login or register to post comments by DarkMath
on Tue, 10/12/2010 – 09:09
#642983

Velvet “currency devaluation/gold revaluation” Weekend (bitchez)

Login or register to post comments by Jake Green
on Tue, 10/12/2010 – 09:09
#642984

Fuck a price target anyway, I’m using my physical as a store of wealth, not as a trade.

Login or register to post comments by Cpl Hicks
on Tue, 10/12/2010 – 09:17
#643001

Seems to me that if your not going to consider your gold as tradeable then it’s hard to classify it as wealth.

Login or register to post comments by Jake Green
on Tue, 10/12/2010 – 09:23
#643018

let’s just say, I’m not trading it for the current regime of fiat

Login or register to post comments by Cpl Hicks
on Tue, 10/12/2010 – 11:00
#643323

Isn’t Marchionni the godfather of that family?

Login or register to post comments by bigdumbnugly
on Tue, 10/12/2010 – 09:12
#642989

1365… we have 1365 bid here… do i hear 1380…  1380? yes, that man in the third row… 1380, do i do i,do i hear 1380… now 1430!  1430 bid by the nice gent with unicredit… now 1465…. 1500?  do i hear 1500?  yes!  unicredit back at 1500…  whoa! 1650!  1650 bid by that squid-like dude in back.  1650…1650…  timeout.  a guy named sinclair said he was first with that bid…  i’m sure it will all work out…

2000? who will be first at 2000?

Login or register to post comments by treemagnet
on Tue, 10/12/2010 – 09:14
#642994

Perhaps the longest article ever written when “just buy gold” would do.

Login or register to post comments by steve from virginia
on Tue, 10/12/2010 – 09:29
#643021

Goldman sez … “Top in the gold market years away”.

I dunno, there are a lot of other ‘assets’ (currency and liquidity traps) competing for cash. Better figure out what you are going to DO with the gold before you buy.

I would look for declines first, only go Comex if you intend to take delivery of 100oz. You may lose money … just keep that in mind.

 

 

Login or register to post comments by Rusty Shorts
on Tue, 10/12/2010 – 09:28
#643033

Max Keiser, very telling report.

Login or register to post comments by benb
on Tue, 10/12/2010 – 14:45
#644074

Max Keiser has some great calls… along with some ethics.

Login or register to post comments by Porkbellytrader
on Tue, 10/12/2010 – 09:41
#643068

the corn, wheat, cotton and bean numbers make no sense….6.25 corn and 9.25 beans? DOES NOT PENCIL

Login or register to post comments by FluffyCone
on Tue, 10/12/2010 – 09:42
#643075

Help a layman out here…  I already know that I’m an idiot, so please don’t belabor that point.  So here is my question.

If I buy physical gold at the spot price today.  Who do I sell it to tomorrow?  There just seems like there is not much of a secondary market for this stuff.  As an exercise, I purchased a 1 oz gold coin for spot.  I then tried to find a place to sell the coin (like pawn shops, friends, etc.).  The pawn shop only wanted to pay half of the spot prices.  Friends and family were not interested.  The grocery store would not exchange it for a fair amount of food, etc. etc. etc.  So how do I spend it?  What do I not understand.  How does gold help the guy on mainstreet?  What would be the use case?  Thanks….

Login or register to post comments by blunderdog
on Tue, 10/12/2010 – 11:07
#643343

In a real currency collapse, the fiat-exchange rate would show a huge nominal “profit.”  The coin you paid $1400 for will be “worth” $15000 or $25000, so even a significant cut on spot price would show a nominal gain.  That’s not a satisfying answer, of course, if that amount of notes is worth a fraction of what it would be worth today.

But importantly–you will likely have the option of spending the gold, rather than selling it.  You want a car?  A rifle?  A windmill?

One gold coin just might trade for such a thing, regardless of how many or how few paper notes you can exchange it for.

Login or register to post comments by digalert
on Tue, 10/12/2010 – 11:15
#643366

Find a PM coin dealer, I have several. Ask if they will buy back what they sell. They sell with whatever their premium/markup is. However, they buy back charging the same premium.

Login or register to post comments by Xibalba
on Tue, 10/12/2010 – 09:54
#643119

there are ‘gold-for-cash’ shops popping up all over the place.  they’ll pay you spot with zero premium. 

Login or register to post comments by Dollar Bill Hiccup
on Tue, 10/12/2010 – 09:59
#643134

Go dwarf … or can’t you loosen your knuckles from your coins?

It’s not a religion, its an investment …

Login or register to post comments by wiskeyrunner
on Tue, 10/12/2010 – 10:07
#643166

Goldman says buy…… means sell sell sell sell

Login or register to post comments by wafflehead
on Tue, 10/12/2010 – 10:53
#643304

I am tired of these stupid comments about going short because Goldman is raising the target. Goldman said the price would go to 1300 when it was trading in the low 1220. Obviously if you went short trying to be smartass contrarian you would be holding the stick now.

Login or register to post comments by VFR
on Tue, 10/12/2010 – 11:02
#643327

Oh Fluffycone, you really don’t understand. Gold is not for the common man. It is for the rich and governments . even if  fiat collapsed it will be used as a transfer for extremely large transactions at country level. If that happens silver will be for the common man or you wil be bartering packs of 200 cigarettes. If you really want to buy gold and be selling it as soon as you buy it then try biullionvault.com. Otherwise hang on to it ofr  afew years and then judge if the decsion was right to buy it.

Login or register to post comments by Downtoolong
on Tue, 10/12/2010 – 11:14
#643364
I don’t think Goldman really cares whether the gold market goes up or down. Their main goal is to get investors involved in commodity markets that they and a handful of other players largely control so that they can shave everyone else coming and going.   

Login or register to post comments by VWbug
on Tue, 10/12/2010 – 12:03
#643526

you say that like it’s a bad thing : )

I mean, that’s essentially the definition of broker dealer.

Are they supposed to be doing something else?

Login or register to post comments by Thunder Dome
on Tue, 10/12/2010 – 11:19
#643376

Gold going lower.  This is a kiss of death.  Goldman been selling gold assets all morning long.  Guaranteed.

 

Buy whiskey.

Login or register to post comments by FreedomGuy
on Tue, 10/12/2010 – 11:23
#643394

I think Jake got it right. It depends on why you are trading gold as to how you look at any predictions short or long term. My bottom line is that the U.S. and even most countries in Europe cannot, will not and have no intentions of ever paying their debt obligations…at least in real money. It is an impossible task regardless of which party is in power. While I figure that Republicans are better than Democrats, most of them are economic morons and don’t or won’t have the capability to make sound nonpolitical difficult economic choices. Libertarians cannot get elected en masse and have only a small chance of taking over the Republican party.

About two years ago I was buying currency hedges against the dollar and doing moderately well when I realized that over time there would be worldwide competitive devaluations. Then you have to buy real things with real value.

I buy physical gold and silver to replace linen and paper with something of value. I’m a long term holder. It gets more urgent when I read about QE II and even potential plans by members of the U.S. Congress to nationalize 401k’s. So, I am a long term holder against worst case high or hyperinflation scenarios. My kids may inherit my metals for all I care. I still predict that a safe deposit box full of precious metals will still be worth more than a box full of dollars or even many other investments over a long time period. Plus, I am hedged against economic meltdowns particularly of the Weimar Republic type.

If you are a trader or short term investor then you need to read more carefully what Goldman and others project for the near term because you are taking shorter positions. You need to guess whether or not you are being manipulated, arbitraged or otherwise fooled as some here post, lol. Good luck!

As a long term investor, I can buy on significant drops and enjoy the appreciation on the inevitable rises. I buy because I believe in a dark gray to black economic future for the United States and the West in general thanks to populist politics, socialism and fiat currencies. The rules of economic physics will bend in my favor, I believe.

Login or register to post comments by Mariposa de Oro
on Tue, 10/12/2010 – 12:27
#643597

Well said, FreedomGuy.  I’m doing the same thing you are.  I have only $1500 to play with each month.  I’m almost priced out for an oz a month.  I can buy 1/2, 1/4 and 1/10 oz increments for a while longer.  I see my au as an insurance policy or as something pretty to leave to my daughter if the policy isn’t needed.

Login or register to post comments by lawrence1
on Tue, 10/12/2010 – 11:41
#643456

Ignore Goldman, ignore Soros.  Fundamentals will prevail … as Sancho Panza opines, Whether the stone hits the pitcher, or the pitcher hits the stone, its going to be bad for the pitcher.  With all the grey and black swans in the air, its going to be good for PMs, and most everything else will be covered in swan shit.  Read Martin Armstrongs latest about the Greek bankers… Goldman is going down.

Login or register to post comments by Thunder Dome
on Tue, 10/12/2010 – 11:54
#643499

Time to buy and hold equities will be when Goldman goes belly up.

Login or register to post comments by Stuck on Zero
on Tue, 10/12/2010 – 14:04
#643916

If Goldman says it’s going higher it can only mean one thing … the big guys are selling.  Goldman is in the business of making money for the big guys and misleads the little guys.

 

Now I think I’ll sell my little gold piece. 

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