Morgan skeptical of gold move

Up 1.1% to $1,338 per ounce, gold takes out a new YTD high - with the GLD now ahead by 11% for 2014 - but the team at Morgan Stanley is a seller of the rally.

Calling the move an overdue bounce following five quarters of declines and heavy ETF outflows, Morgan says the metal is still held hostage by rising real interest rates and the strong greenback. The team also notes one conspicuous feature of the "bounce": Relatively low volume.

Morgan's forecast for gold is $1,160 this year and $1,138 in 2015, both below the estimated $1,200 marginal cost of production.


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Comments (23)
  • Grant Dossetto
    , contributor
    Comments (200) | Send Message
    Good fuel for metals to continue to run.
    24 Feb 2014, 01:32 PM Reply Like
  • drw12334
    , contributor
    Comments (6) | Send Message
    Are your shorts under performing Morgan??
    24 Feb 2014, 01:35 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4381) | Send Message
    Low volumes? Seems to me that stocks are showing low volumes as well. But Shanghai Exchange hasn't been suffering from low gold volumes like the COMEX and the bullion ETFs.
    24 Feb 2014, 01:40 PM Reply Like
  • karjam
    , contributor
    Comments (18) | Send Message
    Banksters just trying to talk up their Gold Rigging Goes Mainstream- Financial Times $GLD,$GDX,$NUGT,$DUST,...
    24 Feb 2014, 05:27 PM Reply Like
  • Brian Bobbitt
    , contributor
    Comments (2087) | Send Message
    I say, Morgan is taking the other side of the trade. If I were president,[of the USA] I would assure the public that when a major bank announces something is going to move in a particular direction, that its portfolio be disclosed before making an announcement, or within a certain time window. ANY shenanigans would be met with horrific fines and perhaps loss of business license, just like what would happen to me if I traded on inside info.
    I for one am getting real tired of the tail wagging the dog.
    (Wish I could swear on line, then you would see how I am sugar coating my true feelings.)We need our big banks, we do NOT need big crooks!
    Capt. Brian
    The Lost Navigator
    24 Feb 2014, 01:49 PM Reply Like
  • karjam
    , contributor
    Comments (18) | Send Message
    You got that right! Banks Are Obsolete!
    24 Feb 2014, 05:27 PM Reply Like
  • minecanary
    , contributor
    Comments (1413) | Send Message
    Get real. The Prez tells more fat ones then anybody.
    24 Feb 2014, 06:01 PM Reply Like
  • filipo
    , contributor
    Comments (4680) | Send Message
    "still held hostage by rising real interest rates and the strong greenback"
    With $/€ at 0.7281 one can't call the greenback exactly strong.
    And I wouldn't call the euro strong either if one considers all the mayhem that still pursues that unified currency: next new government in Italy due to political stalemate, Greece still in shambles, French economy hardly surviving the socialist experiments...
    It's a miracle that the €/$ is still so strong. That can only be explained by the $'s weakness. It wouldn't surprise me if the high interest rates are rather an unwanted omen of ongoing financial disaster than something that is wanted by the authorities. What if debt grew so unserviceable that rates can't be subdued any longer ?
    24 Feb 2014, 01:59 PM Reply Like
  • evan.prospect
    , contributor
    Comments (704) | Send Message
    If deflation hits, it should only last a few months to 24 months maximum. We are still printing $65 billion a month and after winding down QE, the Federales will still keep ZIRP in place for awhile (in part, to service the debt while Congress drags its feet in making Medicare, Medicaid, Social Security, and Defense Spending more sustainable).


    Medicare as a system is so heavily flawed and heavily subsidized (about 300%) that our next president (hopefully a leader than a partisan hack) can't avoid reform. Too many people in this country want something for nothing or something for very little (like Medicare) and that HAS to change.
    24 Feb 2014, 03:01 PM Reply Like
  • ziriot
    , contributor
    Comments (29) | Send Message
    "Medicare heavily subsidized (about 300%)" - what does that even mean? Without documentation backing it up, and without saying it in a way that actually makes sense, I'll give your comment all the respect it deserves; none.
    24 Feb 2014, 04:09 PM Reply Like
  • justaconsumer
    , contributor
    Comments (104) | Send Message
    LOL gold price is 1337 !!!
    24 Feb 2014, 02:57 PM Reply Like
  • SharkDude
    , contributor
    Comments (785) | Send Message
    yes of course gold is useless. but i am sure morgan thinks Facebook at 180B is a steal.
    24 Feb 2014, 03:02 PM Reply Like
  • nooseah
    , contributor
    Comments (752) | Send Message
    Yawn. More sell side analysts reading tea leaves and failing to notice the 800lb gorilla in the room with them. Mind you, mentioning a potential failure of fiat money may just be a sackable offence in a bank ...
    24 Feb 2014, 03:08 PM Reply Like
  • Ross Healy, CFA
    , contributor
    Comments (99) | Send Message
    Has anyone every seen a long sustainable move start out on high volume? That usually comes at the end, not the start.
    24 Feb 2014, 04:28 PM Reply Like
  • ddearborn
    , contributor
    Comments (201) | Send Message


    Another article on gold from Seeking Alpha; Another article bashing gold on Seeking Alpha. I will give 2 thumbs up for creativity. After what must be a least the 100th negative article on gold in the last few years they keep making up new reasons to knock it. And I will give credit where credit is due, this site never lets the facts or the truth get in the way of a good story. And on the rare occasion there is a shred of truth or factual information, half truths, omissions, and misdirection is the rule of the day.
    24 Feb 2014, 05:09 PM Reply Like
  • BlueOkie
    , contributor
    Comments (10729) | Send Message
    If you see ads on tv to buy gold - RUN!!!!
    24 Feb 2014, 06:11 PM Reply Like
  • Jack144
    , contributor
    Comment (1) | Send Message
    Ross...if there is an over abundance of shorts near the bottom, that could account for high volume...whether the final lows are in remains to be seen.


    My works shows there is likely another down wave. That doesn't mean there
    has to be a new low, but there could be.
    24 Feb 2014, 08:25 PM Reply Like
  • ImperialCrab
    , contributor
    Comments (13) | Send Message
    Well said. The banks are surely corrupt, as are more than a few of the gold pumpers that so many simple folk like to follow.
    24 Feb 2014, 08:58 PM Reply Like
  • karjam
    , contributor
    Comments (18) | Send Message
    The only reason there are "down waves in gold/silver" is because of BIS Bankster undeliverable "paper-gold/silver" naked short slams in the wee hours of the morning. Comex has 100:1 "paper to physical gold claims. Since, this "paper-gold" crap is more then any real gold available, this is a fraud.
    24 Feb 2014, 10:41 PM Reply Like
  • Interesting Times
    , contributor
    Comments (15305) | Send Message
    One must do the opposite of what those folks put in print !


    Sheeple will follow them all the way off the cliff..
    24 Feb 2014, 08:42 PM Reply Like
  • lord rothschild
    , contributor
    Comments (53) | Send Message
    bought all physical g s and hard assets 800-1100 5 yr ago. spent 10% of that more recently for off grid infrastructure. would be glad if gold goes under 800 for rest of decade and still recieve soc sec as my expenses are low. hope china and co buy out usa inc and release cheap energy tech etc. world needs. if us uk elite resist
    and go to wwlll we either all die of radiation or its limited and we survive a year of chaos. ultimate pount of gold etc is hedging system failure. not speculation.


    the drop from 1900 to 1200 was when fukushima did not cascade into total shtf.
    if not contained near total radiation death is certain by early 2020s. if contained 50% death by then. if radiation detox is developed as low as 20% by then. mean time wall st world parties with monopoly money and has no clue. so no panic yet.


    gold is like a fire extinguisher with a crisis premium. if fire too big we're all dead.
    24 Feb 2014, 10:41 PM Reply Like
  • james.
    , contributor
    Comments (1395) | Send Message
    Morgan Stanley needs to start preparing their papers to file bankruptcy, unless they soon admit to their wholly erroneous judgement on Gold Price. Gold is now rising up on its 3rd Leg Up, making new all-time highs of $2700 per oz in May 2015; this ongoing Gold Bull Market started at $253 circa 2000; Gold completed a normal Bull Market correction in 2013 on semilog paper. Look to it ! Feb 25, 2014 at 12:01 a.m. PST.
    25 Feb 2014, 03:01 AM Reply Like
  • 6151621
    , contributor
    Comments (1172) | Send Message
    Calling all Morgan Muppets: Gold to go lower (and we're such nice guys we'll buy all the gold you want to sell)
    25 Feb 2014, 06:47 AM Reply Like
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