Gold may reclaim its safe-haven status by year-end, analysts say, on continued central bank...

Gold may reclaim its safe-haven status by year-end, analysts say, on continued central bank purchases and demand from emerging economies and as investors refocus their interest in cash. OCBC Commodities targets $1,800/oz by the end of the year. In the short-term, expect more price volatility.

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Comments (20)
  • ChartProphet
    , contributor
    Comments (133) | Send Message
    Gold is not a safe haven. It will move together with the broader market.


    If China and the global economy continues to cool, gold will fall.


    Gold Bubble: Profiting From The Impending Collapse of Gold
    Published By Wiley, April 2012
    28 May 2012, 02:38 PM Reply Like
  • Cliff Wachtel
    , contributor
    Comments (1766) | Send Message
    CP - when you say "broader market" are you referring to risk assets? if so, you're saying that gold is a risk asset.


    This is equally mistaken. Gold is the one popular asset that is neither risk nor safe-haven, but rather a currency hedge that can go up or down in risk on or risk off markets.


    The confusion is very common, even reknowned market writers like Dennis Gartman get confused, as I wrote:



    For those interested in becoming more competent investors I explain the full story of gold's real correlations, along with other common but misunderstood market correlations, in my book, The Sensible Guide to Forex.


    For a description of the book, see:


    For advanced sneak preview reviews, see:
    28 May 2012, 03:34 PM Reply Like
  • kanjikikuchi
    , contributor
    Comment (1) | Send Message
    Gold's safe-heaven status will go up in UE first by decreasing Merkel's politic power in Germany and by increasing Spanish finance problem.
    28 May 2012, 02:53 PM Reply Like
  • Cliff Wachtel
    , contributor
    Comments (1766) | Send Message


    see my reply to ChartProphet, you share the same confusion. Gold is neither safe haven nor risk asset, as its performance in recent years has shown.
    28 May 2012, 03:36 PM Reply Like
  • Clint007
    , contributor
    Comments (552) | Send Message


    "The IMF central bank gold demand figures for April were very bullish and suggest that central bank demand in 2012 may be even higher than the 456.4 tons added last year – which was the most in almost five decades."


    "The World Gold Council estimates that central banks will buy as much as 400 tons this year."


    "The data yesterday suggests that demand may be even higher than these levels and there is also the near certainty that larger central banks, such as the People’s Bank of China, are quietly accumulating gold reserves and not reporting their purchases to the IMF – as was done previously."


    With all the years I'm in Gold (since 1989), nobody, nobody are and were good prophet in predicting Gold moved.
    28 May 2012, 03:10 PM Reply Like
  • Cliff Wachtel
    , contributor
    Comments (1766) | Send Message


    ah, the first thing I can basically agree with in this comment stream. See my reply to ChartProphet and K...(whatever) regarding the basic confusion of most investors.


    and yes, adding to the unpredictability is that CBs like the PBOC are at times stealth buyers/sellers, mostly buyers in past years and probably continue to be, just waiting for better prices
    28 May 2012, 03:39 PM Reply Like
  • remurraymd
    , contributor
    Comments (2274) | Send Message
    (GLD) does rise and fall with markets and margin calls BUT
    Performance of 300-400% v (UUP) (TLT) (DIA) tend
    to make it ths best place and the safest place to be
    in any currency debasing environment.We will remain
    long buy big dips amply rewarded over time.
    28 May 2012, 04:03 PM Reply Like
  • joemarolla23
    , contributor
    Comments (48) | Send Message
    precious metals such as silver and gold in my opinion have been manipulated for so many years now. some large banks may still have tremendous short positions to tame gold prices from going any higher due to the weakening dollar and more money printing from our friend big Ben Bernanke. in this election year, another round of QE3 is going to be necessary to pump up the stock market from horrible weekly and monthly employment numbers and slow growth. gold and silver could make new all time highs in the coming months ahead. soon enough everything will unravel
    28 May 2012, 04:04 PM Reply Like
  • Neckermann
    , contributor
    Comments (21) | Send Message
    Owning gold requires patience and good nerves.
    It always paid off at the end and this for thousands of years!
    28 May 2012, 04:11 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11171) | Send Message
    We have no idea how much gold China is hoarding right now because they don't have to report current accumulations.


    We are near the event horizon of a global deflationary collapse. Even with the trillions on top of trillions of new currency and debt, prices for non-consumables continue to collapse.


    Expect more inflation in hard assets and real estate and buy gold and silver on dips.
    28 May 2012, 04:43 PM Reply Like
  • hyperion15
    , contributor
    Comments (73) | Send Message
    Inflation and deflation simultaneously? Not sure I understand this.
    28 May 2012, 06:05 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11171) | Send Message
    Inflation in the things you wish to buy.


    Deflation in the things you wish to sell.
    28 May 2012, 08:46 PM Reply Like
  • Cliff Wachtel
    , contributor
    Comments (1766) | Send Message
    beware though, in times of extreme fear demand for liquidity (like for USD) overrides inflation/currency hedge fear that fuels gold, so gold drops. Gold rises on fear of loss of value of currency. Central bankers appear to be giving us every reason to fear that, though nearer term EU giving us fear of market collapse/panic coming.


    Longer term though, many of the developed world currencies are being debased, hence my recommendation to view the links in my comment above for a source of solutions to hedge currency risk for average mainstream investors
    29 May 2012, 08:29 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (11171) | Send Message
    That is true. Plus land is also an excellent currency hedge even though it is completely illiquid.
    29 May 2012, 08:31 AM Reply Like
  • Cliff Wachtel
    , contributor
    Comments (1766) | Send Message
    ??what about those selling what "you wish to buy" in line one.


    perhaps you're referring to stagflation? where value of currency falls, growth flat, but price of certain key commodities rises and drives up cost of living?
    29 May 2012, 08:35 AM Reply Like
  • charles111
    , contributor
    Comments (61) | Send Message
    I am long GLD.
    28 May 2012, 09:09 PM Reply Like
  • goldmember steve
    , contributor
    Comments (58) | Send Message


    That comment does not make sense high price for the things you wish to buy but low price for things you wish to sell.


    Wont that cancel out what you said and every one will be in the same boat any ways? Just trying to get my head around it that"s all.
    29 May 2012, 02:55 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (11171) | Send Message
    Millions of Americans want to sell their homes but are underwater. (Deflation)


    Grocery bills are higher year over year. (Inflation)


    College costs are heading through the roof. (Inflation)


    Stock portfolios have shrunk in the past five years so millions of Americans have stocks they must hold on to or sell at a loss. (Deflation).


    Etc., etc.
    29 May 2012, 04:47 AM Reply Like
  • winningtrader
    , contributor
    Comments (2459) | Send Message
    ... Medical costs up 6.5% YOY.


    I think that the forces of inflation and deflation are going to fight it out for some time. Of course, if the FED prints enough money, inflation is going to be sky high. They are not likely to print that much and mind it that before 2008 the M0 money supply was ~900 billion and now is ~2.7 trillion. So, printing ~ 2 trillion dollars has not caused very high inflation, according to government calculations. This, if true, is remarkable. When you add to that huge monetary stimulus the 1.3 trillion of annual government budget deficit you arrive at the amazing 2% GDP growth. So, ~600 billion of money printing annually and 1.3 trillion of budget deficit help generate 2% ~ 300 billion of growth per year.
    Imagine where the economy would be without all the government ''free'' money. Well, there is an argument that the economy would actually be better but over the short term I doubt it. Basically, the world is in a depression and I personally think that this is one much worse than the Great Depression of the 1930's. The problem now is that the real crisis hasn't started yet.
    So, the significant money printing globally has generated some inflation but the weak economy (the global depression) causes deflation and these forces keep on fighting each other. I doubt anything good is going to come out of that fight.
    29 May 2012, 05:29 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11171) | Send Message
    I used to think that all of the money printing would lead to hyperinflation. But after 3.5 years it is obvious that the world is caught up in a deflationary black hole of deleveraging that will vaporize 20 trillion dollars worth of global assets when all is said and done.


    Once the cycle is complete I doubt the Fed, BOJ, China and ECB will take their feet off of the gas peddle at the exact right time and once the Hoover Dam of new cash breaches the walls of the TBTF banks LOOK OUT!!!


    THAT is when we will get flooded with money that will have no where to go. It will look like a fiscal Hurricane Katrina.


    That is when prices will begin to skyrocket.
    29 May 2012, 07:24 PM Reply Like
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