Did Goldman Sachs’ Recent Gold Forecast Predict the Fed Will Print More Money?
- Posted on November 15, 2011 at 3:36pm by
Becket Adams
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On Monday, banking giant Goldman Sachs announced it is staying long on gold. Due to low real interest rates, slower U.S. economic growth, and rising debt, the bank has also raised its gold forecast for 2012.
“We expect gold prices to continue to climb in 2011 given the current low level of U.S. real interest rates. Further, with our U.S. economics team now forecasting slower U.S. economic growth in 2011 and 2012, we expect U.S. real interest rates to remain lower for longer, supporting higher gold prices through 2012,” the Goldman report states.
The bank also said that the ongoing debt crisis in the eurozone is “skewing the balance of risks to higher gold prices.”
Ben Bernanke has already pledged to keep interest rates at all-time lows for at least mid-2013. Furthermore, the Federal Reserve recently slashed its economic growth projections for 2012. Fed officials now expect the U.S. economy to grow by 2.5 percent-2.9 percent next year, down from previous projections of 3.3 percent-3.7 percent made in June.
What strategy is the Goldman Sachs employing to take advantage of the current economic situation?
“With expiration approaching, we are rolling our outstanding long Dec-11 COMEX gold trade recommendation, entered on October 11, 2010 with an initial value of $1,364.2/toz and a current gain of $423.9/toz, into a long Dec-12 COMEX gold future position with a reference price of $1,800.5/toz,” said Goldman.
In English: Goldman was bullish on gold for 2011, and continues to be bullish on gold for 2012.
(Related: Gold and Thanksgiving)
The report also gives a short-term price forecast. For gold, the bank increased its forecasts:
- Three-month forecast ▲ 7.0 percent to $1,760 a troy ounce [the standard measurement used for precious metals] from $1,645/oz
- Six-month forecast ▲ 5.8 percent to $1,830/oz from $1,730/oz
- 12-month forecast ▲ 3.8 percent to $1,930/oz from $1,860/oz.
Credit Suisse has also said that gold may climb over $1,800 in the coming days due to negative real interest rates as the key driver. However, with the Fed’s low interest rate pledge, negative real interest rates are likely to remain for a number of years. That being said, many expect gold prices to climb above $2,000 per ounce.
Dr. Walter de Wet, the Head of Commodity Research at Standard Bank in London, expects gold to hit $2,200 at the end of the first quarter next year. He believes more quantitative easing is on the way for Europe and the U.S., and does not see the Fed stopping its expanding balance sheet for another three or four years.
Standard Bank predicts that $500 billion of QE3 will add $200 to the gold price early next year.
In the middle of Goldman’s report is a very telling sentence that aligns the interests of Goldman Sachs and Standard Bank.
“Given our U.S. economists’ cautious economic outlook and the significant downside risks associated with the European turmoil, additional Fed easing might well be needed,” the report reads (emphasis added).
While the fundamental reasons for precious metals remain strong, Goldman going long on gold may also be a bet on QE3.
[Editors note: portions of the above are from a cross post that originally appeared on Wall St. Cheat Sheet.]
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hiteker
Posted on November 16, 2011 at 9:39amTranslation: Barak Obama has just ordered the fed to print money so as to try to save his ass and his corrupt cronies. Further devaluation of the dollar will make more people dependent on me, the supreme leader. During my next term I will extend the term limits of the presidency by executive order, to allow the Left to plunge the US into a full blown socialist country. Ben, start the presses.
Report Post »V-MAN MACE
Posted on November 17, 2011 at 8:32amGoldman Sachs owns the Fed, and the world.
Unless we and our guns have something to say about it.
Report Post »fortyshooter
Posted on November 16, 2011 at 8:32amGoldline is perfectly okay to deal with. But I buy physical Au and Ag a few dollars at a time. The Krugerand remains the least expensive way to buy Au in one-oz increments, and I wish I had more. Of course, Ag is a good PM alternative, but bulkier for the buck. Everytime the Fed does a QE thing, the metals rise in price because of the dollar’s devaluation. It is inevitable that Au and Ag will continue to rise.
Report Post »LIBS-ARE-DINGLEHEADS
Posted on November 16, 2011 at 7:34amSOMEONE ……….please…..take a FLAMETHROWER to Golddouche Sucks…………..
This giant of a sucking company needs to be nuked into oblivion.
Report Post »KidCharlemagne
Posted on November 16, 2011 at 12:14amGod Bless, Andrew Jackson!….he was right!:
“Why The United States Bank Was Closed
President Andrew Jackson
July 10, 1832
Is there no danger to our liberty and independence in a Bank that in its nature has so little to bind it to our country. The president of the Bank has told us that most of the State banks exist by its forbearance. Should its influence become concentered, as it may under the operation of such an act as this, in the hands of a self-elected directory, whose interests are identified with those of the foreign stockholders, will there not be cause to tremble for the purity of our elections in peace, and for the independence of our country in war. Their power would be great whenever they might choose to exert it; but if this monopoly were regularly renewed every fifteen or twenty years, on terms proposed by themselves, they might seldom in peace put forth their strength to influence elections or control the affairs of the nation. But if any private citizen or public functionary should interpose to curtail its powers, or prevent a renewal of its privileges, it cannot be doubted that he would be made to feel its influence.”
Report Post »http://www.lexrex.com/enlightened/writings/bank/jackson.htm
Armed Patriot
Posted on November 16, 2011 at 9:11amGod Bless, Andrew Jackson???
This guy was BAD!!! Although he might have done some good things, he was not on the RIGHT side (vs wrong side). Jackson signed the Indian Removal Act into law in 1830, leading to the trail of tears and the deaths of over 10,000 (actual numbers may vary) Native Americans. He was a slave holder (common for the times) and his true support for slavery is questionable, he was very hostile to abolitionists.
His enthusiastic followers created the modern Democratic Party. Jacksonian democracy promoted the strength of the presidency and executive branch at the expense of Congress, much like today. Jackson believed in Manifest destiny not Divine Inspiration.
While he might have done some good, he did some very bad things. Judge a tree by its fruit.
Report Post »KidCharlemagne
Posted on November 16, 2011 at 10:40amArmed Patriot
Posted on November 16, 2011 at 9:11am
God Bless, Andrew Jackson???
This guy was BAD!!! Although he might have done some good things, he was not on the RIGHT side (vs wrong side). Jackson signed the Indian Removal Act into law in 1830, leading to the trail of tears and the deaths of over 10,000 (actual numbers may vary) Native Americans.
=====================================================================
How is that any different than what Abraham Lincoln did in Minnesota only 32 years later?!:
“Minnesota Indian War of 1862
In the month of August last the Sioux Indians in Minnesota attacked the settlements in their vicinity with extreme ferocity, killing indiscriminately men, women, and children. This attack was wholly unexpected, and therefore no means of defense had been prodded. It is estimated that not less than 800 persons were killed by the Indians, and a large amount of property was destroyed. How this outbreak was induced is not definitely known, and suspicions, which may be unjust, need not to be stated. . . . . The State of Minnesota has suffered great injury from this Indian war. A large portion of her territory has been depopulated, and a severe loss has been sustained by the destruction of property. The people of that State manifest much anxiety for the removal of the tribes beyond the limits of the State as a guaranty against future hostilities.”
Report Post »Abraham Lincoln, December 1, 1862, Second State of the Union Address
KidCharlemagne
Posted on November 16, 2011 at 10:49amArmed Patriot
Posted on November 16, 2011 at 9:11am
God Bless, Andrew Jackson???
This guy was BAD!!! Although he might have done some good things, he was not on the RIGHT side (vs wrong side). Jackson signed the Indian Removal Act into law in 1830, leading to the trail of tears and the deaths of over 10,000 (actual numbers may vary) Native Americans.
===============================================================
In fact, Abraham Lincoln’s Indian Removal Act of 1863 is still on the books!:
“The Indian Removal Act of 1863 still exists in federal law. It was enacted by President Abraham Lincoln following the Dakota Conflict of 1862, banishing the Dakota from Minnesota. Urdahl began working to repeal the IRA after Gov. Tim Pawlenty appointed him Minnesota’s official state representative to the Abraham Lincoln Bicentennial Commission last summer.”
Report Post »http://www.house.leg.state.mn.us/members/pressrelease.asp?party=2&pressid=3160&memid=10792
colt1860
Posted on November 15, 2011 at 11:09pmINSCRIPTIONS ON FEDERAL RESERVE NOTES
1913 – 1934
“Redeemable in Gold on demand at the United States Treasury or in Lawful money, at any Federal Reserve Bank.“ ”Will pay to the bearer on demand one dollar.”
1934 – 1968
“This note is legal tender for all debts public and private and is redeemable in lawful money at the United States Treasury, or any Federal Reserve bank.“ ”Will pay to the bearer on demand one dollar.”
1968 – 1998
“This note is legal tender for all debts, public and private” THERE IS NO PROMISE TO PAY, NOR IS A NOTE A DOLLAR! A dollar was defined in our Coinage Act of 1792.
There is a Constitutional difference between LEGAL MONEY and LAWFUL MONEY.
We don’t own an absolute Title to anything today. A free man can only buy property with lawful money. No private land is owned today with full rights and duties, absolute ownership. We all pay a tax to our Masters every year. We are bond-servants to the banks, which are practically owned by international banks. We have been enslaved, and no American today actually owns any real property. We the People have been deceived into being the surety for the UNITED STATES debt. We have been hoodwinked by the global elites. Welcome to the new Global Communist State.
The rich ruleth over the poor, and the borrower is servant to the lender. Proverbs 22:7
Don’t forget to load up on bread, butter, and bullets. It’s going to be a bumpy ride.
Report Post »colt1860
Posted on November 16, 2011 at 12:31am“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and it’s issuance.” — James Madison
Report Post »patriotsofworkingamerica
Posted on November 16, 2011 at 6:17amAgreed… The few have had far too much power over the many for far too long. First the churches control, then the governments have the control. Then the churches and the government battled for the control of the people. I should be able to talk to my government and my God freely. I should know that the fruits of my labor are backed not by the full faith of the government but by the people.
Report Post »KidCharlemagne
Posted on November 15, 2011 at 10:54pmShoulda’ listened to Andrew Jackson:
“The corporations which create the paper money can not be relied upon to keep the circulating medium uniform in amount. In times of prosperity, when confidence is high, they are tempted by the prospect of gain or by the influence of those who hope to profit by it to extend their issues of paper beyond the bounds of discretion and the reasonable demands of business; and when these issues have been pushed on from day to day, until public confidence is at length shaken, then a reaction takes place, and they immediately withdraw the credits they have given, suddenly curtail their issues, and produce an unexpected and ruinous contraction of the circulating medium, which is felt by the whole community. The banks by this means save themselves, and the mischievous consequences of their imprudence or cupidity are visited upon the public. Nor does the evil stop here. These ebbs and flows in the currency and these indiscreet extensions of credit naturally engender a spirit of speculation injurious to the habits and character of the people. We have already seen its effects in the wild spirit of speculation in the public lands and various kinds of stock which within the last year or two seized upon such a multitude of our citizens and threatened to pervade all classes of society and to withdraw their attention from the sober pursuits of honest industry.”
Report Post »-President Andrew Jackson, Farewell Address, March 4, 1837
KidCharlemagne
Posted on November 15, 2011 at 11:14pmIf you didn’t know better, then you’d swear that Andrew Jackson is describing subprime mortgages and mortgage-backed securities in this particular section of his farewell address almost 170 years before the mortgage meltdown actually happened….
Report Post »colt1860
Posted on November 15, 2011 at 11:16pm“The [Federal Reserve Act] as it stands seems to me to open the way to a vast inflation of the
currency… I do not like to think that any law can be passed that will make it possible to submerge the gold standard in a flood of irredeemable paper currency.” — Henry Cabot Lodge Sr., 1913
“Ronald Reagan believes Government [The Federal Reserve] causes inflation. Not business. Not labor.”
Reagan said: “In the 1960′s, the federal Government decided to stop tying the value of the dollar to gold. This permitted them to PRINT as much money as they wanted to spend. And that‘s WHY we’ve had THIS crippling inflation. We’ll NEVER regain price stability until we RESTORE some form of GOLD backing to the dollar. As President, MY FIRST PRIORITY will be to make the dollar the most trusted currency in the world.” http://www.youtube.com/watch?v=qxEq2LWUPzc
The fifth plank to the Communist Manifesto:
5. Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.
“Some people think the Federal Reserve Banks are the United States government’s institutions.
Report Post »They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers” — Congressional Record 12595-12603 — Louis T. McFadden, Chairman of the Committee on Banking and Currency (12 years) June 10, 1932
colt1860
Posted on November 15, 2011 at 10:38pmRomney’s top donors are:
Goldman Sachs $354,700
Credit Suisse Group $195,250
Morgan Stanley $185,800
HIG Capital $176,500
Barclays $155,250
http://www.opensecrets.org/pres12/contriball.php?cycle=2012
Report Post »Armed Patriot
Posted on November 16, 2011 at 9:21amWho are nobamas???
Report Post »Armed Patriot
Posted on November 16, 2011 at 9:25amObamas top contributors 2008…
University of California $1,648,685
Goldman Sachs $1,013,091
Harvard University $878,164
Microsoft Corp $852,167
Google Inc $814,540
JPMorgan Chase & Co $808,799
Citigroup Inc $736,771
Time Warner $624,618
Sidley Austin LLP $600,298
Stanford University $595,716
National Amusements Inc $563,798
WilmerHale LLP $550,668
Columbia University $547,852
Skadden, Arps et al $543,539
UBS AG $532,674
IBM Corp $532,372
General Electric $529,855
US Government $513,308
Morgan Stanley $512,232
Latham & Watkins $503,295
US Government $513,308??? WTF????
Report Post »Armed Patriot
Posted on November 16, 2011 at 9:33amObamas top contributors 2012…
Microsoft Corp $171,573
Comcast Corp $113,800
Harvard University $99,975
Google Inc $95,066
University of California $85,941
DLA Piper $75,375
Skadden, Arps et al $69,374
Chopper Trading $64,815
Stanford University $62,928
Ballard, Spahr et al $62,300
National Amusements Inc$62,100
Time Warner $61,850
Arnold & Porter $54,700
Goldman Sachs $50,124
Columbia University $49,347
Latham & Watkins $49,082
Exelon Corp $48,625
US Dept of State $48,077
Mayer Brown LLP $47,700
Sidley Austin LLP $44,825
US Dept of State $48,077??? WTF??? A federal department that can use my tax dollars to contribute to a communist presidential fund that I disagree with???
Report Post »A Conservatarian
Posted on November 15, 2011 at 10:14pmThe value of gold is catching up to the amount of money that has been printed. Understand that it’s not only the price of gold that can be manipulated, but the price of everything can be manipulated. When the basis of trade is value-less paper, the racket can only exist so long as those trading the value-less paper, believe it has value. Since it is not objective value we are entertaining, but a morphed subjective-psuedo-objective measure of value, understanding the racket helps in evaluating where the price is, where it should be, and where it’s going. The money supply has been quadrupled and if the banks start lending out on that 90% fractional reserve requirement, that amount can be compounded by a factor of 9. Yeah. The price of gold for where it should be in our little monopoly money world should actually have quadrupled as soon as all that money was printed, if we are being honest about inflation, there we have what SHOULD have happened, but did not. Currently the price has gone up only by 3 times its formal value since the height of the market in 06. Lets also be honest and recognize that height of the market, was only the height of the credit relaxation. In order for the price of gold to trend toward where they should be at in the future with no further QE (ahem, it’s called inflation really, not quantitative easing) it should be trading at $2300 around January-March and in that time period it should perform another pull back before more upward motion.
Report Post »blazingaway
Posted on November 15, 2011 at 8:11pmTime to get out of Gold … Goldman is selling and needs buyers.
Report Post »It’s like the mortgage CMO, CDO … they’re selling while recommending you buy.
These are people not to be trusted
MrKnowItAll
Posted on November 15, 2011 at 7:12pmBy headscarf‘s if Obama get’s re-elected. Tell your women not to shave. LEARN ARABIC….OR GET PLENTY OF GUNS AND AMMO. That’s me, the latter.
Report Post »jam ustigran
Posted on November 15, 2011 at 6:59pmThe historical position for silver is..15to1 with gold….should be 118 dollars right now.
Its far below 200 ma…
Report Post »TDOM
Posted on November 16, 2011 at 12:26amthats because no one uses silver for money – when the dollar crashes and we start using silver as well as gold – silver will shoot up more inline with the 16 to 1 ratio
Report Post »Detroit paperboy
Posted on November 15, 2011 at 6:37pmIts only a matter of time before it all crumbles beneath the weight of unsustainable socialist programs and policies….. Exactly like the soviet union, and exactly the same reason….SOCIALISM DOES NOT WORK. period , everything bankrupting this nation is a Democrat scheme, Thank you LBJ… for your war on prosperity !!!!
Report Post »Snowleopard {gallery of cat folks}
Posted on November 15, 2011 at 6:51pmIndeed, and that is what Mr Obama wants to have happen. The simple fact is when the key words of ‘may be needed’ or ‘will be considered’ and such, then it will actually happen.
Report Post »Rweb
Posted on November 15, 2011 at 6:30pmGold goes up and so does silver which is way more affordable.
Report Post »Conservative_T-Rex
Posted on November 15, 2011 at 6:16pmPretty sure GB told us QE3, QE4, QE5, etc…… was coming. You’d have to be a fool to not invest in gold. Goldline isn’t a scam by any means… but there are better places to buy gold. Gotta love capitalism and competition. Smackdown33 is anti-smart.
Report Post »Lather
Posted on November 15, 2011 at 8:53pmI am a Coin Collector, YOU WOULD BE A FOOL TO EVER BUY GOLD OR SILVER FOR INVESTMENT.. And GOLDLINE IS A TOTAL SCAM.. If You Think GL is a good buy,, I will sell ANYONE ANY OF MY COINS AT GL’s Price.. SERIOUSLY,
Report Post »smackdown33
Posted on November 15, 2011 at 5:58pmGoldman Sachs, Jewish. Federal Reserve, Jewish. No surprise here about who has their hands around the throat of our economy. What was that line Lord Rothschild once murmured?
Report Post »Libertarian
Posted on November 15, 2011 at 6:15pmGovernment and government’s lack of fortitude in dealing with the Federal Reserve. Government is responsible. Don’t blame a corporation for the failings of government, when it is government that has the authority to marriage itself with business, not vice versa. Corporations are not destroying this country, government’s marriage to them is.
Government sponsored welfare, subsidies, benefits, redistribution’s, tax shifts, bailouts et al are destroying this country – people and entities are the ones holding their hand out. It is like blaming farm subsidies on farmers, sure there is some lack of ethics in accepting money through force.
If one wants to change this country, start with family ethics then the ballot box, change government.
Report Post »Detroit paperboy
Posted on November 15, 2011 at 6:29pmWe are so screwed !!! Major league screwed….
Report Post »MomOf2Boys
Posted on November 15, 2011 at 7:58pm“Let me issue and control a Nation’s money and I care not who makes its laws”. Mater Amschel Rothschild, founder of the Rothschild banking dynasty.
Report Post »Bakko Bomma
Posted on November 16, 2011 at 8:35amWhat was that line Lord Rothschild once murmured? He said Smackdown has a mental illness.
Report Post »GilbertAcct
Posted on November 15, 2011 at 5:55pmIf you want to invest in gold, just be sure NOT to go with Beck’s main sponsor, Goldline (unless you want to get ripped off). Check out this free report on gold scams before you invest…
http://www.goldripoffs.com/
Report Post »Founding Father2
Posted on November 15, 2011 at 5:50pmHave you heard the dire look that Benjamin Franklin has on taxes, interesting: http://www.americanparchment.com/video/2011/nov/franklin_thoughts_taxes.html
So why are they used so frivolously like to bail out and print additional money that has nothing to back it?
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