Gold and Silver

What Goldman Sachs' latest forecast could mean for gold

Gold and Silver new
From Global Economic Trend Analysis:
 
In the less-than-useless category, Goldman Sachs lowered its gold price targets by over $200 an ounce following the recent plunge. Goldman now says gold's cycle has been turned: 
 

The cycle for gold prices, which climbed for 12 straight years, has probably turned as the recovery in the U.S. economy gathers momentum and investment holdings collapse, according to Goldman Sachs Group Inc., which reduced forecasts for the metal.

 

The bank cut its three-month target to $1,615 an ounce from $1,825 and lowered the six- and 12-month forecasts to $1,600 and $1,550 from $1,805 and $1,800. Goldman reversed an assumption exchange-traded products holdings will expand in 2013, analysts Damien Courvalin and Jeffrey Currie wrote in a Feb. 25 report...

 

Billionaire investors George Soros and Louis Moore Bacon cut their stakes in gold ETPs last quarter, while John Paulson maintained his share, government filings showed this month. Global holdings reached a record 2,632 tons on Dec. 20.

 

Gold futures fell to $1,554.30 on Feb. 21, the lowest since June 29, after minutes from the U.S. Federal Reserve's January meeting showed debate over the pace of asset purchases.

 

"Our economists believe that the downside risks to their forecasts have diminished while the uncertainty about the size of QE3 is high," the Goldman report said. "We believe that a shift has occurred over the past few months with conviction in holding gold waning quickly."

 
In contrast to the opinion of Goldman, I would like to note there is little uncertainty about QE. Bernanke is insanely committed to the idea.
 
In regards to downside risks to the economy, I will also take the other side...
 
 
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