Friday, Nov 28, 2008
AEP cites Citigroup internal note indicating gold could hit $2000 in 2009
Telegraph: Citigroup says gold could rise above $2,000 next year as world unravels
"Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup."
OK just another gold story, but from Citi this time
Posted by doom&gloom @ 07:52 AM (917 views) Add Comment
26 Comments
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1. bystander said...
Does this suppose that Citi has a long on gold and needs to make this back as soon as possible? Whats the betting they have it pegged at just over $1000/ounce and they will get out there., or there abouts, leaving the rest who have been lured in dealing with a very volatile arena and the very probable risk of their investments melting away very quickly. Just a thought, but Citi have just needed to be 'nationalised' by the US and are in desperate need of money to keep going as a private entity. Sounds like RAMPING to me.
2. Bacaudae said...
I have been reading stories for the last 6 months about how gold is about to go through the roof (accompanied often by some impressive trend graphs). So what has happened? Not a lot, the price today is still below where it was 6 months ago. Meanwhile, can I take it that the reported shortage in supply of gold coins is due to private investors reading these reports and trying to get a little bit of the action.
3. harold said...
bystander, yes sounds like ramping to me too. However, there are a lot of rumours flying around that COMEX may have to default in December, should the Russians et al demand physical delivery. Everyone suspects that the paper market in PMs is a joke - if, however, it is shown to be a joke the price of physicals will likely explode. My gut feeling is that it is safer to be long on PMs, including silver, than short.
4. fjcruiser said...
VI like Goldman predicting the oil would reach $200 a barrel in the summer.
5. matt_the_hat said...
1. bystander - "dealing with a very volatile arena"
Is it Gold that is volitle or pounds/dollars - I can't quite work it out....
I'm sure fiat money is relatively stable compared to Gold in the long run ;-)
6. debtfree said...
ramping.... hype.... maybe they are long.....
more like denial.
to think this is hype or ramping means your ignoring the worst financial situation in history.
7. rickyb said...
I think if we are dealing with the possibility of "the worst financial situation in history", then the price of gold is going to be pretty irrelevant, and that just getting hold of enough food for your family might be a little more important.
8. jamonit said...
http://www.moneyweek.com/investments/precious-metals-and-gems/why-gold-bugs-will-get-bitten-by-deflation-13817.aspx
9. jamonit said...
http://www.moneyweek.com/investments/precious-metals-and-gems/obamas-difficulties-will-be-good-for-gold-14146.aspx
10. jamonit said...
You pays your money and you makes your choice. Or is it the other way round?
11. debtfree said...
The deflation argument is nonsense.
Japan had deflation for years, yet the gold price rose, explain that ?
12. sold 2 rent 1 said...
The small investor nearly always loses money on asset bubbles.
They pile in late and sell late.
Gold will probably hit $2,000 by December 2009, fall back sharply in January 2010, and then power to $4,000 by April 2010.
This is what Calleman's model tells me.
13. stillthinking said...
Take a look here. Gold price history in yen.
http://goldmoney.com/en/charts/0jpy120.png
The price of gold in yen just tanking as we speak.
14. stillthinking said...
"Crunchie economics". I just made up a new economic term. Comes in a gold wrapper, looks golden and lots of little bubbles in it.
15. debtfree said...
Deflation started in the early 1990s. The Bank of Japan and the government have tried to eliminate it by reducing interest rates (part of their 'quantitative easing' policy), but this was unsuccessful for over a decade. In July 2006, the zero-rate policy was ended, and by 2008 Japan was again sustaining positive inflation rates.
This goes to show that the deflation argument is nonsense.
Gold rose in yen through the deflation years and since 2008 when japan was again sustaining positive inflation, the gold price is now dropping ?
16. jamonit said...
Yen going up 'cos it's a safer currency than most, so gold/yen goes down. Current deflation risk is global, not just japanese. Different this time.
17. matt_the_hat said...
Can someone with a jot of intelligence answer me this - deflation is easy t solve (print money) so why did Japan suffer a decade of deflation
18. stillthinking said...
Or you could equally argue that gold went through a bubble. Considering everybody on this site wants house prices to crash so that they can buy one without bankrupting themselves, why would an appropriate strategy be to buy gold now, hold onto the gold until property values bottom out, then at a time when everybody wants to jump back into property attempt to sell on the gold. Why ?
@jamonit, you are saying that the current gold price is dependant on the risk of defaults, or to put it another way, without the risk of defaults the inherent value is much lower. Get out of sterling yes, I can see that, but into gold? Gambling in my opinion.
19. debtfree said...
Matt the hat,
Japan's confidence had been drained away. Not even zero interest rates would convince people to spend. Why would you if house prices for example were still falling.
20. stillthinking said...
http://my-wealth-builder.blogspot.com/2007/06/japan-nation-of-savers.html
Japan's problem is a lack of consumption. Why would a nation of savers support printing money?
Personally I think they should have and if they slip back into deflation they well might do so in the future. Maybe the government took the view that the population would dump the currency en masse.
21. matt_the_hat said...
So Japan has a nation of savers and hyper-inflation is politically unpopular - what's politically popular for our politicians I wonder
22. jamonit said...
stillthinking....I should say that 'm not a gold nut, merely an amateur investor looking for something that might prove to be safer than average whether we get inflation, or deflation. I do hold some gold though.
23. jamonit said...
Matt...with deflation, as I understand things, printing and distributing more money merely encourages people to save even more, as everything will be cheaper next month. So more money isn't a cure.
24. mountain goat said...
Its not so much what gold and silver are worth, its about how much unsustainable debt there is behind all the major fiat currencies which seriously undermines their value, evens theatens their existence. Gold and silver are money with no debts. If the debt mountain can be sorted out gold and silver can go back to sleep. But the opposite seems to be happening, the debt mountain is collapsing and gold and silver are waking from their slumber because there is no where else to store your wealth.
25. matt_the_hat said...
23. jamonit - what I missed then was the velocity of money - i.e. tax breaks for the poor paid for by the printing presses - I hope ZaNu arn't listening - bu66er they thought of it already
26. greytornado said...
If a time traveller from the Roman Empire turned up today, with an urn of gold coins anywhere on earth, he could buy into the relevant fiat currency at the value it has. It's all relative. The small gold coin that would have bought him a toga in his day would buy him a suit today. Gold spans the centuries. It always has and always will. The small number of the wise will prepare themselves and retain their savings.