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A majority of analysts polled by Bloomberg turn negative on gold, the first bearish read this...

A majority of analysts polled by Bloomberg turn negative on gold, the first bearish read this year. Topping the list of concerns are slumping demand in India - where jewelers have been closed for 3 weeks in protest of higher taxes - and the Fed being a little less eager to paper the planet with greenbacks. Gold +0.8% to $1,627.
Comments (16)
  • Castrese Tipaldi
    , contributor
    Comments (43) | Send Message
     
    LOL!
    Probably nobody informed them that US has a public federal debt of 15 TRILLIONS $ at the moment (and counting) plus several other TRILLIONS $ at State level plus 55 TRILLIONS $ (estimated) in unfunded liabilities for future pensions and health care and various benefits claims, with annual federal deficits projected around 1.5 TRILLIONS $ for the next several years plus 0.5 TRILLIONS $ trade deficit every year.
    5 Apr 2012, 09:29 AM Reply Like
  • The_Hammer
    , contributor
    Comments (3810) | Send Message
     
    The Fed bought 60% of all treasury issuance last year 2011.
    China exports are slowing so less need to recycle more dollars into treasuries.
    China Imports more oil from Saudia Arabia than USA. Ring ring ring.
    How will we sell our debt issuances going forward?
    Will the govt force citizens to buy these toxic treasuries?
    Projected 2012 deficit $1.3 trillion.

     

    The waters are receding and the sheep are wandering off shore.
    5 Apr 2012, 03:41 PM Reply Like
  • stockzilla
    , contributor
    Comments (5) | Send Message
     
    I really don't see how anything has changed. The Fed is keeping the status quo and Europe is still in as bad shape today as it was last month. The buying in India will resume and the first hint of labor trouble the Fed will step in. Gold seems to have support around the 1608 level. A breach of that will portend lower to around 1550. I suspect most people will be flushed out around 1600 and it will rebuild. MS and GS still have targets north of 1800. Just my 2 cents.
    5 Apr 2012, 09:34 AM Reply Like
  • htmortimer
    , contributor
    Comments (96) | Send Message
     
    For the few who value gold on the basis of industrial demand and for the many who see it as a hedge against inflation, the view that gold is overvalued is understandable, even though the risk of inflation cannot yet be taken off the table.
    For those who fear the consequences of the pyramid of debt in the developed world, gold looks cheap. That's because of the very real threat of deflation. Indeed, were it not for the massive printing of money we would be there already.
    It is interesting that few have questioned how it has been possible to print so much money without creating a massive inflation; had this been done at virtually any time in the past the result would have made the inflation of the late '70s and early '80s look mild.
    I think the answer lies in the power of the massive deleveraging that is taking place and which is highly deflationary.
    If indeed deflation emerges as the real threat, then all debt will become suspect as the falling prices that deflation brings will make existing debt harder and harder to pay off until bankruptcy is the only option.
    In such an event, gold will be the only safe haven.
    5 Apr 2012, 09:44 AM Reply Like
  • Sheik Rattle Enroll
    , contributor
    Comments (583) | Send Message
     
    Your conclusion is based on the premise that gold is the only thing that rises with inflation.

     

    If that were the case, inflation would hardly be such a concern.
    5 Apr 2012, 11:42 AM Reply Like
  • htmortimer
    , contributor
    Comments (96) | Send Message
     
    Not at all, the prices of lots of things rise during inflation. I was just focused on gold because it was the subject of the survey. However, as a financial asset, it is a much more liquid investment than many of the other things that rise in an inflation.
    5 Apr 2012, 04:47 PM Reply Like
  • youngman442002
    , contributor
    Comments (5131) | Send Message
     
    "and the Fed being a little less eager to paper the planet with greenbacks".....really... is going to buy our deficits???? In the trillions......it will be the Fed...OR...Interest rates will go to 20%....which will bankrupt our country.....watch the BRICĀ“s....they are shying away from the USD reserve currency status...the tide is changing....
    5 Apr 2012, 09:45 AM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    Don't worry, the FED knows what to do. If you are concerned that the FED will not buy bonds to fund the deficits, sleep well. They will buy the bonds of course, but first we need to do a bit of dancing. You know how it is done. What kind of girl would do it immediately without playing hard to get.
    5 Apr 2012, 01:42 PM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    Very bullish signal. People are forgetting about the yellow metal which means we will see a significant rise in 12 months time.
    5 Apr 2012, 12:09 PM Reply Like
  • billydgarrett
    , contributor
    Comments (182) | Send Message
     
    well..........just look at past 30 year chart on gold and draw your own conclusion.
    5 Apr 2012, 12:48 PM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    In order for us to see some sort of top in gold we need to see some exit strategy from the Fed surrounding the $1 Trillion dollar swap program bailing out Europe.
    5 Apr 2012, 12:53 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11015) | Send Message
     
    When have the analysts been right on gold. They are bearish on it 80% of the time and only get bullish after it rises up over 100% in a short period of time. Although gold isn't a great investment unless you just want to hedge inflation, it beats a lot of investment houses recommendations. The sad fact is they are bearish because it doesn't take an investment guru to tell you to hold gold bling.
    5 Apr 2012, 03:36 PM Reply Like
  • dieuwer
    , contributor
    Comments (2255) | Send Message
     
    It just shows you how huge the bubble is in investment houses.
    5 Apr 2012, 03:45 PM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    Actually, outside of Canada many investment houses ignore gold and gold mining companies because of a lack of understanding. It is not as simple as plugging numbers into a model. It is more complex and with the high margins many producers do not have a need for hedging or project financing so it gets very little attention.

     

    Understanding gold and silver miners is more complex. You have to get a handle on the long-term strategy and management.

     

    The fact that everyone is forgetting about gold is a very bullish contrarian indicator. It tells me that when everything falls apart in Spain later this year prices will go shooting higher.

     

    The Fed is buying 60% of the Treasuries issued and just entered into $1 trillion in swaps with Europe yet none of the problems are fixed.

     

    You can see the strains in the financial system.

     

    A second bullish indicator for me was that I ran into no hedge funds or analysts outside of Canada at the recent PDAC in Toronto. That said, analysts from China were all over the place. I could not take two steps without tripping over an Asian analyst trying to be coy about who they were representing.
    5 Apr 2012, 04:02 PM Reply Like
  • evan.prospect
    , contributor
    Comments (687) | Send Message
     
    It will be interesting to see what would happen if the Chinese, Japanese, and oil producers like Saudi Arabia pullback on their treasury holdings and American borrowing costs rise (which would be a further strain on our solvency). I have to imagine the Fed would create more money on its computers and buy treasuries to push down interest rates again.

     

    I anticipate this happening, especially if we continue our current government policies. Thus, I am long GLD, GDX, and GDXJ.
    5 Apr 2012, 06:09 PM Reply Like
  • sniper22
    , contributor
    Comments (111) | Send Message
     
    bullish CONTRARIAN indicator !!
    8 Apr 2012, 01:26 PM Reply Like
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