Goldman Sachs - Gold To Remain Above $900
Goldman Sachs has seemingly been on the wrong side of every trade since this crisis started. Well, except for the most important one. That being the lobbying or Washington trade that has kept the company in business at taxpayer expense. In actuality Goldman was on the wrong side of bad trades for a long time. It's just relatively recently that we are finding this out. Let me phrase this another way. When required to compete on merit in a functioning market-based economy, I don't see a lot of evidence that anyone at Goldman knows what they are doing. Therefore, is Goldman's call on gold a useful contrarian data point the shiny metal will eventually head south from this multi-year price band?
Does anyone remember our post back in the summer of 2007 on gold and oil?
"One must understand the dynamics underlying these two commodities to get some idea of what is driving their price action. I really haven't read anyone's thesis that I believe accurately reflects the macro factors at work. So, without blathering on as to why, I believe gold is a proxy for credit and oil is a proxy for Merrill, Goldman, Morgan Stanley and their hedge fund compatriot's ability to create liquidity."
Our statement about oil has been proven to be an accurate analysis of its meteoric rise. And, given the dynamics before us, I remain confident the environment remains where our remarks about gold will be proven accurate as it pertains to credit. As we wrote before, the Federal Reserve most assuredly saved gold from a collapse last year and they won't be handing out party favors a second time.
At this point in time, gold is one of my favorite "investments" not to like. So is Goldman Sachs. As a single data point Goldman's call might be of little value. But given other factors, I do give credence to using Goldman's call on gold as an anecdotally useful contrarian data point.
Does anyone remember our post back in the summer of 2007 on gold and oil?
"One must understand the dynamics underlying these two commodities to get some idea of what is driving their price action. I really haven't read anyone's thesis that I believe accurately reflects the macro factors at work. So, without blathering on as to why, I believe gold is a proxy for credit and oil is a proxy for Merrill, Goldman, Morgan Stanley and their hedge fund compatriot's ability to create liquidity."
Our statement about oil has been proven to be an accurate analysis of its meteoric rise. And, given the dynamics before us, I remain confident the environment remains where our remarks about gold will be proven accurate as it pertains to credit. As we wrote before, the Federal Reserve most assuredly saved gold from a collapse last year and they won't be handing out party favors a second time.
At this point in time, gold is one of my favorite "investments" not to like. So is Goldman Sachs. As a single data point Goldman's call might be of little value. But given other factors, I do give credence to using Goldman's call on gold as an anecdotally useful contrarian data point.
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