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Rising physical demand for gold (GLD -0.8%) is "price responsive, and not price setting," says...

Rising physical demand for gold (GLD -0.8%) is "price responsive, and not price setting," says Goldman, remaining bearish on the yellow metal. Improving economic activity, less accommodative monetary policy, and higher real rates are the driving factors and they all say gold is headed lower, perhaps nearing triple digits by the end of next year.
Comments (15)
  • Tao Jaxx
    , contributor
    Comments (1274) | Send Message
     
    I'm with GS on that one. This BS about "the Chinese are buying" is just the famous paper tiger.
    Looks now like they'll have other things to worry about than buying expensive door stops and paperweights: local financial system hurting like crazy....
    24 Jun 2013, 11:03 AM Reply Like
  • thrash
    , contributor
    Comments (120) | Send Message
     
    - This has to be the most orchestrated, contrived conspiracy against gold ,in the entire history of this precious metal. I'm a happy buyer all the way down.
    24 Jun 2013, 11:11 AM Reply Like
  • abdul raab
    , contributor
    Comments (72) | Send Message
     
    Chinese are definitely buying.

     

    - American man in China
    24 Jun 2013, 11:21 AM Reply Like
  • Tao Jaxx
    , contributor
    Comments (1274) | Send Message
     
    Course they're buying, nobody disputes that. They're just price takers, not price makers, that's Goldman's point. In other words,don't count on their buying to reverse the price trend.
    As to the peanut gallery conspiracy theory, it borders on irresponsibility to allocate capital on the basis of arguments such as these.
    But let's go even further: even if you catch the paranoid virus and accept the conspiracy lunacy, then by all means get out of PM: the bogeyman brought gold down $600 already, he's going to get it down another four or five hundred bucks. Not to mention silver. Sell now, you'll pick it up cheaper later.
    24 Jun 2013, 01:04 PM Reply Like
  • abdul raab
    , contributor
    Comments (72) | Send Message
     
    Let's think rationally about things here. We know the gov't currently allocates $85B / month to 'accomodate' the faulty markets. There's no question a heavy amount of printing is going on these days to accomodate. (China dropped 5.5% but US is OK at just 1% loss? Who the heck is buying when rest of world going into chaos?) US has this ability to inflate because they are still top dog in the world order of things.

     

    Anyways, that comes out to about $1T in easing a year. If the current money supply is $7.2T, that means the gov't just expanded the money supply by ~14%. That means the true rate of inflation is ~14%, not the 'official' 2% as reported!

     

    When people catch on how fast the money supply is growing, and without a true economic recovery, what do you think will happen?

     

    Take a look at this graph and tack on a 14% increase in one year - inflation is skyrocketing almost vertically.

     

    http://bit.ly/PqOxSy

     

    I see a bogeyman in there somewhere. My best guess - this game goes on for another year or two max, with money supply increasing at same levels due to 'addictive qualities' and inability to calm markets when QE is taken away. When recovery doesn't come and people finally catch on (China definitely is seeing it after witnessing their markets crash by 5% without intervention), PM's will finally skyrocket. By then, however, US may be in pretty big trouble with more chaos throughout the world.

     

    Don't think this won't happen...it will.
    24 Jun 2013, 01:27 PM Reply Like
  • Russ Winter
    , contributor
    Comments (648) | Send Message
     
    Shanghai is dominating physical gold trading with 918 mt delivered YTD versus the Comex paper market's 103 mt.

     

    http://bit.ly/12lBBT2
    24 Jun 2013, 04:55 PM Reply Like
  • kvatchik
    , contributor
    Comments (499) | Send Message
     
    What? Fed is printing 85bln/month you're saying? It is a conspiracy theory.
    24 Jun 2013, 05:01 PM Reply Like
  • Investor Talkroom
    , contributor
    Comments (473) | Send Message
     
    Rising interest rates will stop the recovery. The Fed will resume money printing and sooner or later all that reserves on banks balance sheets will escape into the economy and push the inflation up.
    24 Jun 2013, 11:21 AM Reply Like
  • CraigPowell
    , contributor
    Comments (96) | Send Message
     
    Goldman bearish on gold?
    Some were bearish on gold already last September, at gold price around $1770 per ounce: http://tinyurl.com/pbg...
    Credit Suisse's Tom Kendall told CNBC on Monday:"You need to re-examine your expectations for the gold market ifyou're long -- you need to stop thinking in terms of crisis and start thinkingabout where gold was pre-crisis"
    24 Jun 2013, 11:29 AM Reply Like
  • abdul raab
    , contributor
    Comments (72) | Send Message
     
    Markets are rigged. Fed is against Gold. Goldman, CS, et al are in cahoots with the Fed to strengthen USD / weaken Gold.
    24 Jun 2013, 11:32 AM Reply Like
  • cfg3450
    , contributor
    Comments (84) | Send Message
     
    CKCoinsPlus above is the best article I have read..

     

    The Future is always a puzzle but the explanation above is more reasonable
    than most.
    24 Jun 2013, 12:18 PM Reply Like
  • Solon
    , contributor
    Comments (98) | Send Message
     
    It seems to me that most 'economic' activity ~( based on 'taking in each other's laundry' , ~ clever manipulation of the forex, ~manufacture of new washing machines ( cell phones, notepads etc), ~ high pressure hype in the Wall Street casino )~ is simply busy work to distract us from the 'bankers' siphoning off 85 billion bucks per month.
    If we ever realize that " there's a sucker born every minute", and the corollary, " that sucker is us", there will be a bunch of angry, homeless, poor puppies out there!
    24 Jun 2013, 12:32 PM Reply Like
  • blowforhome
    , contributor
    Comments (7) | Send Message
     
    Even after 40 years of black propaganda, ridicule and attrition, gold is still a major component of the West's financial structure - with no country reducing its gold reserves, which are still a large part of their financial assets, while the East is making frantic efforts to catch up.
    Poor Gordon Brown, who actually believed the B.S. propaganda, still hasn't found a job worthy of his experience, due to the idiocy of selling Britain's gold to form the 'Brown Bottom.
    Gold might be under pressure at the moment but it isn't going away any time soon.
    24 Jun 2013, 04:48 PM Reply Like
  • PhilosopherStone
    , contributor
    Comments (44) | Send Message
     
    A simple strategy for our big govt. is to put the miners to the brink then bail them out. That way, not only could they print money at will, they could mine their own gold, silver, oil, nat gas, copper, iron ore or uranium. They should just take over every industry rather than just their chosen winners, no?
    24 Jun 2013, 11:09 PM Reply Like
  • showchrome
    , contributor
    Comment (1) | Send Message
     
    After loosing 26% I decided to sell my gold bars..
    If I believe the gold lovers I'll be back and buy cheap again, feels good I sold..
    If I believe we are screwed and they will succeed, feels good I sold,
    25 Jun 2013, 12:17 AM Reply Like
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