Tuesday, December 4, 2007

The [Goldman] team also makes its argument for shorting bullion

Slippery Slope Steepens...

"The [Goldman] team also makes its argument for shorting bullion [ as in: now] on the basis of technical analysis. That, the team says, suggests that gold is topping out and that longer-term momentum indicators are turning lower. “We see scope for acceleration through $770 to re-test the $600-650 levels prevailing ahead of the summer,” the team said."

Will Goldmans be buying the gold once they have panicked investors to sell?

Posted by sold 2 rent 1 @ 11:02 AM (979 views)
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10 thoughts on “The [Goldman] team also makes its argument for shorting bullion

  • japanese uncle says:

    I wouldn’t be surpirsed if they are planning to hire Goldfinger to do his job on Fort Knox, yet again.

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  • japanese uncle says:

    Sorry the argument is reverse. Thought they are buying futures.

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  • Ahhhhh – technical analysis. The same sort of stuff they were using to price CDOs.

    Well – best sell gold then. NOT!

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  • Goldman are the shrewdest bank around. Does anyone try to second guess them on this gold shorting? Maybe they base it on the oil price which is likely to drop next year. Gold usually tracks oil. Although Goldman obviously controls important people in Washington I don’t think they do in China and Saudi Arabia. If these countries decide gold is a better currency than the rotten western currencies then gold will rocket and Goldman’s gold short will lose them money for a change.

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  • Goldman suggest shorting DOLLAR based gold, and base this on the dollar likely becoming more stable, and the ‘credit crunch’ easing over the coming months.??????????

    It’s a brave man that bets against Goldman, but this seems an odd prediction to me.

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  • if they are shorting gold then they must see strength in the dollar……

    nope. didn’t think so either.

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  • Gold is a commodity like any other. You buy it for one of two reasons:

    1. You plan to make stuff with it, like jewellery or electrical equipment
    2. You reckon some mutt will buy it off you for more than you paid for it

    If there really is a recession on the way, and certainly looks like it, I can’t see so many people want to buy expensive bits of metal to hang round their neck. As for the second possibility, well look where that got people with dot.com shares and buy to let rabbit hutches.

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  • I’m not convinced about what follows – so pull it to bits if you like.

    But, if the world economy locks up because no-one will lend to any one, then everything could dive in price spectacularly as those who need cash are forced into selling whatever they have to someone. As will happen with house prices, the only ones who will be able to sell are either those with something unique, or those who undercut the going asking prices. Their selling price then becomes the going rate and the next ones to sell have to undercut that price – and so on. As people go under – money disappears from the system. The money supply will contract.

    In a deflationary environment, holding cash is the least worst option. That being the case – gold could ‘correct’ too surely?

    I’m no economist – so the above might be a load of [email protected]

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  • This is old news! It looked possible before the weekend.

    One of the grand old men of gold was making the point on bloomberg that gold is currency or commodity depending on circumstance. The value of the dollar pushes along the direction of travel and oil provides some lower order noise. Watching the prices over the last couple of days this has seemd to be true. Gold was initially very oil-jumpy but since yesterday it’s been running independently, it’s over $800 per oz again. The point is the price of gold is proportional to dollar weakness, anyone see the dollar truly firming anytime soon? Look at the current account deficit, which way are US interest rates going? A report produced by another branch of goldman on the same day made exactly the opposite argument.

    It is interesting to note however that the Goldman statement came from someone at the firm who knows Paulson well. What was Paulson before he had the currently poisened challace of being cheif secretary to the treasury (and finding the Gold price a major embarrassment)? Yep CEO at Goldman Sachs. Any link between these facts????

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  • sold 2 rent 1 says:

    “In a deflationary environment, holding cash is the least worst option”
    Correct – but only notes and coins as you cannot trust banks.

    “That being the case – gold could ‘correct’ too surely?”
    Nope. Gold is the safe haven

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