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Goldman sticks with bearish gold forecast

  • Couldn't they have told us 3 days and $65 ago? Gold's 2013 rally won't last, says Goldman's Jeff Currie, sticking with his $1,050 per ounce price target. The reasons for the metal's move this year - the U.S. weather-induced economic slowdown, worries of Chinese credit, and tensions in Ukraine - are set to become non-factors, he says.
  • Firmly in the camp that the economy hasn't caught cold, Goldman says look to the next several weeks of economic data releases to begin confirming the Fed's hawkish message.
  • As for China, Currie sees a gradual wind-down of that credit boom that could hit U.S. growth, but not significantly so. Unless there's further escalation in Ukraine, says Currie, that's become an old story as well.
  • GLD +0.6% today.
  • ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GLL, DZZ, UGLD, DGL, GLDI, DGZ, AGOL, DGLD, TBAR, UBG, GLDE, GYEN, GEUR, GGBP
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Comments (24)
  • Doug Eberhardt
    , contributor
    Comments (2921) | Send Message
     
    I told you 3 days and $65 ago. What did I win? Does anyone take Goldman Sachs predictions seriously?
    21 Mar, 12:14 PM Reply Like
  • AF1951
    , contributor
    Comments (29) | Send Message
     
    Doug,

     

    Goldman is indeed predicable and definitely boring. You have a won a bitcoin !
    21 Mar, 01:56 PM Reply Like
  • pat45
    , contributor
    Comments (332) | Send Message
     
    Gold far from boring and is in definite uptrend..just look at chart. Ignore chatter and buy gold or miners.
    21 Mar, 02:35 PM Reply Like
  • Brandond
    , contributor
    Comments (367) | Send Message
     
    Translation: GS tried to manipulate the gold market, got caught on the wrong side of the trade in Jan/Feb and now they are trying to scare weak hands out of their positions. Very happy with my GDX and GDXJ positions bought in December tax loss season and not selling any time soon. Look at the 10 year chart and think where the miners trade if there is the slightest mean reversion.
    21 Mar, 12:17 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4198) | Send Message
     
    The fact that Goldman Sachs wants my gold enough to lie about its prospects is enough reason for me to hold onto it. Gold is clearly still undervalued, and stocks and bonds are still clearly overvalued. And the economy didn't suddenly improve. But once spring weather is here nobody will be able to blame the cold weather for poor results.
    21 Mar, 01:18 PM Reply Like
  • dublin6
    , contributor
    Comment (1) | Send Message
     
    totally agree with brandond, chinese demand going through the roof, indian import tariffs about to be lifted, these are the real drivers of price for 2014 and on.
    21 Mar, 01:34 PM Reply Like
  • Brian58
    , contributor
    Comments (134) | Send Message
     
    http://bit.ly/1h27mIF
    21 Mar, 01:40 PM Reply Like
  • krugman25
    , contributor
    Comments (19) | Send Message
     
    Most of the comment here are so detached from reality, that just bolsters my opinion that gold has much more hurt in it's futures. I don't understand how those bidding up the start market week after week are the "detatched" ones, yet perma-bull gold traders/investors are so rooted in reality. I submit that both groups of traders are detached, but at least the stock market perma-bull are making money right now. I know people think that gold has some permanently embedded correlation to the stock market or to printing of fiat money, but if you have been watching gold for more than a year and still believe that, you are just willingfully ignorant. I'm not trying to be rude, but some people need some sense talked into them, most won't listen but a few might. Gold has seen no correlation outside of complete random chance to money printing or movements in the market. I will also submit here that the price of gold is driven by everything else "sentiment", and sentiment hinges directly on historical price action.

     

    GLD just formed a very large 2 bar reversal on the weekly candlesticks off of 2 key resistance areas. This means not only was demand not strong enough to break these very key psychological price resistance areas, but we now have a mass amount of short term traders that are stuck in long positions. There is one last "line in the sand", which is somewhere in the $127 range which is a very minor price support, if this is taken out we will see a swift drop. The temporary pops in gold from world events will fade away quickly. If you don't believe me just research previous major world events and how quickly markets returned to normal. After 9/11 markets in less than a month had returned to all time highs, and then proceeded to make higher highs than before 9/11. The Ukraine price bump lasted a whopping 3 days. I have felt that price needed move up to rebuilt the pyramid of long positions, the fresh supply of longs will usher in the next drop below GLDs 52 week low of 114.46. Once you shake out the majority of long positions, a fresh batch of longs are required to drive the next leg down.

     

    I also keep reading about this double bottom. I trade almost solely from price action patterns, and one of the first things you learn about double tops and bottoms are that every ascending/descending triangle starts off as a double/triple top or bottom. Anyone who knows price patterns knows a descending triangle has a double bottom formation inside of it, but the descending triangle pattern trumps the double bottom pattern and has the exact meaning. From my experience descending triangles usually break out on the 3rd touch, which means there is a high chance if price reached ATLs(all time lows), it will break and we will see round 2 of long squeezes.

     

    Obviously nothing is guaranteed, trading is all about probability and risk/reward, but at this point, given the current, very bearish price action signals, there is a very high reward with low risk, and the probability of this thing coming down and retesting the bottom of the ascending triangle is very high, I would dare say 75-80% chance.

     

    You may not like my non perma-bull opinions on gold, but at least do your researched and consider the possibility that perhaps what you believe drives gold, doesn't actually drive gold, and that gold may see the 900's long before it reaches back to it's all time highs. Do you really want to be holding onto losing positions for the next decade just to get back to break even?
    21 Mar, 01:55 PM Reply Like
  • james.
    , contributor
    Comments (298) | Send Message
     
    Your analysis on GLD is way wrong, "krugman 25". The P&F Chart on GLD clearly shows a long-term Double-Bottom, and moreover has a Price Objective of 169 , which is equivalent to a Gold price of approximately $1760 per oz; that will be the 1st leg up within this current 3rd Leg Up Super Cycle; this ongoing Gold Bull Market started at $253 per oz circa 2000, completed a normal Bull Market correction on Semilog Paper in Dec 2013 when it had a Double-Bottom at $1186 per oz, and now continues up on its 3rd Leg Up Supercycle which carries it to new all-time-highs of $2700 per oz. Look to it !
    Roubini issued two late-night Tweets he title "Echos of 1914" which helped spark Gold price sharply upwards that week, earlier in 2014; Roubini stated therein that the current worldwide starkly rising Geopolitical Tensions are similar to those that started World War I . Where have you been man ? March 22, 2014 at 9:09 a.m. PST.
    22 Mar, 12:11 PM Reply Like
  • solarcircle
    , contributor
    Comments (292) | Send Message
     
    krugman, perhaps you haven't been watching very closely but gold is up about $150 off it's low. And everything doesn't revolve around the U.S. - gold has protected me against a 10% drop in the Canadian dollar and there are many emerging markets in the same boat. Stocks can go to zero but gold always has value.
    21 Mar, 02:07 PM Reply Like
  • krugman25
    , contributor
    Comments (19) | Send Message
     
    Of course it is, nothing moves in 1 direction forever. Positions have to be re-accumulated before selling can resume which is why price swings occur in the first place. I'm not sure if you are saying that a 150$ pop off of the 52 week low is reason enough to buy, i can assure you it's not. Also gold not being able to go to zero is again not a good reason to adopt a buy and hold strategy. Just because gold will probably never be zero, doesn't mean it can't lost significant value. So if gold lost 50% or more of it's value, was it worth buying for the sole reason of it not being able to reach 0? What if it took a decade or more to recover that loss? We haven't seen it yet in gold, but if gold is purely driven by market psychology(which I believe it is), then it isn't out of the question. Just ask the people that bought that top of the stock markets during the .dot boom, how great it's been waiting more than a decade to finally break even. If your strategy is making sure your investments can never reach 100% loss then you are probably in the right market, but I would say most peoples strategies are based on making money, not keeping losses below 100%.
    I'm not a perma-bull or perma-bear on gold, I just believe it is like all other markets that are driven by trader psychology,regardless of the supposed fundamentals that drive it. If GLD hits 114$ and fires off a high quality bullish reversal pattern, I will most likely buy it up again.
    21 Mar, 04:14 PM Reply Like
  • james.
    , contributor
    Comments (298) | Send Message
     
    "Krugman 25", you are sadly mistaken when you claim GLD will likely go down to 114. The minor pullback this week in GLD simply cements into place its P&F Price Objective of 169, which equates to approximately $1760 per oz in Gold. Moreover, that is only the 1st leg up within its current 3rd Leg Up Gold Super Cycle which will carry Gold to new-all-time highs of $2700 per oz in May 2015 . Look to it ! March 22, 2014 at 9:16 a.m. PST.
    22 Mar, 12:17 PM Reply Like
  • krugman25
    , contributor
    Comments (19) | Send Message
     
    Being a price action trader I can only speak on what I know. Someone pointed out to me today a H&S pattern that would put a 2nd should at around 124.60, If this happened and if it broke out we would most likely see GLD in the 150 region. There are a lot of "ifs" there as the pattern hadn't completed yet. Although I do still believe if the shoulder doesn't form we are headed to 114 again to retest, potentially break.

     

    I have followed Avi closes with he ES analysis, not so much gold. Does he support the 3rd leg up super cycle w/ $2700 per oz. by May 15th.
    22 Mar, 04:41 PM Reply Like
  • james.
    , contributor
    Comments (298) | Send Message
     
    "Kruggman 25" , you are confused. The $2700 per oz will occur in May 2015, rather than May 15 . Avi recently wrote a poor analysis on NEM under his erroneous conclusion that Gold price will decline to Bank's estimates, which are ludicrous and unfounded estimates which neglect Roubini's recent 2 Tweets he titled "Echos of 1914" (the worldwide Geopolitical Tensions leading to World War I) , as they are simply "talking their books", since the Stock Equities they and their clients hold (DJIA types) have strong negative correlation to Gold price ! Mar 23, 2014 at 8:55 pm PST.
    23 Mar, 11:58 PM Reply Like
  • rubber duck
    , contributor
    Comments (194) | Send Message
     
    They refer to their own clients as muppets. Does anyone take their recommendations seriously? If anything a good contrarian indicator.
    21 Mar, 03:33 PM Reply Like
  • alterami
    , contributor
    Comments (92) | Send Message
     
    Goldman is reportedly so bearish on gold they are considering changing their name to Paperman.
    21 Mar, 03:44 PM Reply Like
  • Brandond
    , contributor
    Comments (367) | Send Message
     
    Funny read; not a gold bug just refuse to get manipulated by the prop trading desks of big WS firms

     

    http://bit.ly/1imSsjz
    21 Mar, 05:15 PM Reply Like
  • ddearborn
    , contributor
    Comments (128) | Send Message
     
    Hmmm

     

    There is no "market" in gold and silver. There is only what 5 guys in a dark room decide each and every day. And they don't take their orders from any duly elected representatives of the people. They work for the corporate/State entities that have the means, motive and opportunity to bet billions everyday. And that no matter what happens it goes their way. And sure as sunshine, they almost never lose money. Random markets in a pits eye.

     

    In the final analysis it doesn't matter a tinkers damn what we say, the "market" says or current/ongoing world events. What matters is what those 5 guys say each and every day. It was designed from the very beginning as a mechanism to simply, easily and safely rig market prices. They win we lose.
    21 Mar, 05:48 PM Reply Like
  • nooseah
    , contributor
    Comments (467) | Send Message
     
    Firstly, Jeff Currie's forecasts tend to be sketchy at best.

     

    Secondly, Goldman is nothing more than a glorified hedge fund, ergo, when Goldman tells clients to Sell, it's because Goldman's prop desk wants to Buy. GS values its profits above its clients - it has always been this way.

     

    The running joke for years has been that if you trade against GS's recommendations every time then you will make money - a joke, apart from the fact there's truth to the claim.
    21 Mar, 06:23 PM Reply Like
  • james.
    , contributor
    Comments (298) | Send Message
     
    Jeff Currie needs to learn how to concede like a man ! The P&F Chart for GLD has given a Price Objective of 169 , which is equivalent to a Gold price of approximately $1760 per oz ! Gold price is in an ongoing Bull Market that began at $253 per oz circa 2000, completed a normal Bull Market correction on Semilog Paper in Dec 2013 when it did Double-Bottom at $1186 per oz, and then rose to $1393 per oz last week . Gold is now rising up on its 3rd Leg Supercycle taking it to new all-time-highs of $2700 per oz in May 2015 .
    I doubt that Currie knows what Semilog Paper is, or what a normal Bull Market correction is. All that Currie looks at in his comments above are fundamentals. Well, here follows are some fundamentals that he mysteriously omits : (1) Roubini did send out two late-night Tweets he titled "Echos of 1914", stating that the rising worldwide Geopolitical Tensions now are similar to those that led to World War I , and in that week in 2014, Gold price did rise sharply ! , (2) Senator McCain made a brilliant speech on the floor of the U.S. Senate last week explaining that Pres Putin has goals of increasing Russian Federation influence to that held by the former USSR, and so Currie is very naive to think that Putin will stop where he is ! , (3) Israel vs Iran is now coming to a head, because the Israeli Navy intercepted a boat load of long-range missile from Iran heading towards militants to use against Israel , and the Israeli PM and Defense Minister have railed against Obama's "soft power"; so look for the strong possibility of Israel Air Power destruction of Iran's Nuclear Power Plant and Centrifuges prior to Passover on April 14, 2014, as PM Netanyahu has vowed "Israel will never allow Iran to have an Atomic Bomb!" and railed at the 6 Month Nuclear Deal that Obama signed with Iran, (4) China vs Japan, Philippines, et.al. on Fishing rights and Island Possession , (5) etc., etc. etc. . March 21, 2014 at 8:25 pm PST.
    21 Mar, 11:29 PM Reply Like
  • mike_simms
    , contributor
    Comments (103) | Send Message
     
    They can predict countries intentions and actions? I think not.
    The fed continues to print money out of thin air at an astounding rate.
    The government spends money at a rate of a trillion a year more than it takes in.
    Strange prediction by Goldman. It can't be the ridiculous unemployment figures which are a joke, perhaps temporary insanity.
    21 Mar, 11:50 PM Reply Like
  • Brandond
    , contributor
    Comments (367) | Send Message
     
    As reported by Bloomberg (not some obscure, gold bug publication), banks have been manipulating the price of gold for years with their daily price fixing scheme. I suspect various governments are also complicit as, the US for one, does not want people investing in gold. Have governments encouraged investment houses to continue to write bearish gold articles while China and Russia significantly increase their holdings? With the price fixing process under the spotlight and prices potentially being set by a more fair mechanism, this can only be a positive for the gold price. (Not a gold bug as I have a 3% allocation to gold through miners but this whole segment of the market seems manipulated)

     

    The Bloomberg article below if you missed it:

     

    http://bloom.bg/1fwjNBa
    22 Mar, 07:45 AM Reply Like
  • nooseah
    , contributor
    Comments (467) | Send Message
     
    To be fair, they're doing "God's work", so be good and follow their 'lead'...
    22 Mar, 09:44 AM Reply Like
  • Barry North
    , contributor
    Comments (283) | Send Message
     
    Jeffrey Currie's recent big calls.

     

    January 2013. Oil to rise to $140 by the summer. Actual circa $110.

     

    October 2013. Gold to fall to $1,050, a “slam dunk sell” he claimed. Gold narrowly breached $1,200 in December and then rose to just shy of $1,380 this month.

     

    Source
    http://yhoo.it/1dlY92G
    22 Mar, 08:51 PM Reply Like
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