Comment by: Francis Soyer 03/18/11
While this piece from the SAC should make gold longs feel giddy one should also take a note of caution. Goldman and the other large sell side firms in terms of research and their proprietary trading patterns act IN THEIR OWN SELF INTERESTS. That said what then does this recommendation mean and how should a speculator react if one knows the above? Most likely that we as of now have reached an intermediate term low. A rise to $1,480 is a piddly squat move from here with gold trading at $1,404 this morning. Which means this recomendation that they are pimping this morning should make gold investors want to start selling in here so Goldman can buy in preparation for the next massive leg up well beyond $1,480. As mentioned in the report below their thesis is pointed at unrest in the middle east and Japan etc. The real issue at hand is that confidence in Governments is deteriorating and THAT is when Gold appreciates. This deterioration is ongoing and unstoppable. Why? Because we all know that our world governments will fail because they have blown themselves up borrowing money that will never be able to be paid back. Its called DEFAULT and it is maybe a few months away at this point.
"Gold Set To Rally" - Goldman Expects Gold To Promptly Rise To $1,480
Submitted by Tyler Durden on 03/18/2011 07:43 -0400
As we are experiencing a furious regime change, the sellside positional updates are coming fast and furious. The latest major recommendation change comes again from Goldman which has just reiterated its belief gold will reach its 3 month target of $1,480 shortly. Of course, after a Cramer recommendation to buy the metal, this is the only call for a higher gold price that should be of great concern to everyone. From Goldman: "We expect gold prices to rally toward our 3-month price target of $1480/toz, and continue to recommend a long gold trade. While the protests and threat to oil supplies in the Middle East and North Africa drove COMEX gold prices to a new record high of $1437/toz on March 2, the events in Japan have paradoxically sent gold prices back below $1400/toz despite the ongoing decline in US 10-year TIPS yields. Given the decline in US real interest rates, we see the recent retracement in gold prices as offering a good buying opportunity, and maintain our long gold trading recommendation as we expect gold to rally to our 3-month price target of $1480/toz."
