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EM troubles an issue for gold, but not oil, says Goldman

  • Goldman's research, explains analyst Jeff Currie, shows oil has relatively small leverage to the "vulnerable" emerging market economies thanks to very low price elasticity, and he notes oil has been unresponsive (i.e. flat to up) amid the EM troubles this year (combined with record seasonal low stocks).
  • Gold, in contrast, has a good deal of price elasticity (think jewelry demand) and very large leverage to "vulnerable" EM economies. Currie's team also expects "spillovers" from the EM slowdown to developed market economies hitting gold investment demand.
  • Gold meanwhile is up another 0.5% today and has taken out $1,300 per ounce for the first time in three months.
  • Gold ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GLL, DZZ, UGLD, DGL, DGZ, AGOL, GLDI, DGLD, TBAR, UBG, GLDE, GYEN, GEUR, GGBP
  • Crude oil ETFs: USO, OIL, UCO, SCO, DBO, DTO, BNO, CRUD, USL, DNO, UWTI, SZO, DWTI, OLO, OLEM, TWTI
Comments (12)
  • Anon5311
    , contributor
    Comments (20) | Send Message
     
    hmmmm......$140s down to $30s..........more bungee than elastic.
    13 Feb, 03:47 PM Reply Like
  • 6151621
    , contributor
    Comments (1174) | Send Message
     
    Goldman looking to push around some muppets so they can buy cheaper. Good work GS!
    13 Feb, 03:52 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8529) | Send Message
     
    Goldman's free advice is worth every penny.
    13 Feb, 04:09 PM Reply Like
  • ddearborn
    , contributor
    Comments (125) | Send Message
     
    Hmmm
    Jewelry demand has been driving gold prices? really I have an absolutely magnificent bridge to sell you. Naturally the record breaking thousands of tons of gold that Russia, China and India have been buying, sky rocketing prices of production, relatively flat supplies, coupled with literally 10's of trillions of dollars flooding world markets over the last 5 years should not have anything to do with prices right?
    The number one purchaser of gold in the world over the last 3 years has been China. The country with the strongest economy over the last 3 years has been China.Prices for precious metals are way down because the FED, the Bank of London and the world's largest banks have conspired to drive prices down as part of an ongoing effort to protect the collapsing dollar and manipulate markets. Without their direct and constant manipulation gold would already be above $4000 an ounce. They are now getting very nervous because they have just about run out of ways to manipulate prices.
    This article is flat out baloney.
    13 Feb, 04:18 PM Reply Like
  • Three Cheese Fondue
    , contributor
    Comments (615) | Send Message
     
    Yeah, they must be really nervous. Keep buying.
    13 Feb, 05:11 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4114) | Send Message
     
    "EM troubles an issue for gold, but not oil, says Goldman"

     

    No, Goldman, you have it backwards. Current EM troubles are an issue for oil, but not gold. The issue the EMs are having is inflation. People flee to gold in times of inflation. When the price of oil rises (as happens in times of inflation) they also curtail their driving and consume less oil.
    13 Feb, 04:41 PM Reply Like
  • Three Cheese Fondue
    , contributor
    Comments (615) | Send Message
     
    Yeah, you tell 'em. You're so smart *you* should be working for Goldman, instead of that guy.
    13 Feb, 05:12 PM Reply Like
  • pacdecimal
    , contributor
    Comments (80) | Send Message
     
    Actually David is correct, as Goldman and other banks that store oil at tankers and other offsite facilities manipulate prices to huge commodity gains.
    14 Feb, 10:47 AM Reply Like
  • filipo
    , contributor
    Comments (3330) | Send Message
     
    EM troubles are ideed an issue for gold: they drive it's price up cause people are concerned about their fiat currencies.
    13 Feb, 04:48 PM Reply Like
  • james.
    , contributor
    Comments (288) | Send Message
     
    Jeff Currie of GS has been way too bearish on Gold, calling for $1050 for 2014. Notice that Gold was up $11 today to $1302 per oz, however, Jeff Currie still clings to his ludicrous forecast on Gold, instead of admitting like a man should to his wrong prediction ! Gold is now on its 3rd Leg Up to new all-time highs of $2700 per oz in May 2015, after having completed a normal Bull Market correction in 2013 on semilog paper in its ongoing Gold Bull Market which began at $253 per oz circa 2000 ! Look to it ! Feb 13, 2014 at 3:39 pm PST.
    13 Feb, 06:41 PM Reply Like
  • 6151621
    , contributor
    Comments (1174) | Send Message
     
    Currie hit his 2018 forecast of $1200 from the beginning of 2013 in 2013:
    http://read.bi/1mfloiv

     

    This shows how wrong these guys can be and why we really don't need to listen to them.
    14 Feb, 01:54 AM Reply Like
  • filipo
    , contributor
    Comments (3330) | Send Message
     
    6521478,
    They're on someone's payroll.......
    14 Feb, 08:47 AM Reply Like
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