Goldman Sachs Lowers Gold Outlook

In April we effectively, and so far profitably, shorted junk bonds and noted that Goldman Sachs was recommending shorting gold. 

We'd already been bearish and short gold for some time.  We remain so, in the longer term, as apparently does Goldman Sachs:  Hedge Funds Cut Gold Bets As Goldman Sachs Lowers Outlook


Quoting and commenting on excerpts from the article:

"Gold futures dropped 23 percent last quarter, the most since Bloomberg data begins in 1975."

When this happens over 10 years into a raging bull market, that bull market is over. 


"Goldman expects prices to drop to $1,050 by the end of next year, 17 percent less than its previous forecast of $1,270, the bank’s analysts said in a June 23 report. Declines will continue as the Fed trims its bond-buying program and investors sell ETP holdings, the bank said."

So far, even when the bank was bullish on gold, their price estimates have proven to be on the high side.  That'll probably continue to prove true. 


"Bullion’s declines are “shattering” investors’ confidence and the metal will probably fall to $1,150 in 12 months, Credit Suisse’s head of commodity research, Ric Deverell, said in a report June 25. Morgan Stanley lowered its 2014 outlook by 16 percent the same day, citing waning demand for haven assets."

It was, and remains, all about confidence - or more accurately about sentiment, hype, lies and willful ignorance of human nature and market history.  A long-term bottom will not occur until people give up on delusions and accept the facts.

 

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