In an odd piece of news today, Dow Jones is reporting that Goldman Sachs has issued a report stating that gold is "near an inflection point" which is likely to come next year and is "pointed lower after".
I find it odd because the reason that Goldman states this is because it expects an improved US economy that will supposedly blunt safe-haven demand for the metal based on its assumption that REAL interest rates will rise.
It's twelve month forecast for the price of gold is cut to $1800 with its 2014 view of $1750. That is hardly a big letdown but still it begs the question - Is this the same Goldman that just last week issued a report predicting that the Federal Reserve will be forced to implement QE4 at this month's FOMC meeting? You might recall that in that report Goldman predicted a $45 billion/month Treasury buying program to be announced by the Fed based on the fact that the US economy was still sluggish and that growth was lagging. This is of course in addition to the already announced and implemented $40 billion/month of MBS paper by the Fed.
Additionally, in that same report Goldman stated that this bond buying program would continue all the way through 2103. In the year 2014, economic conditions would improve enough that the Fed could ramp down the combined QE3 and QE4 programs to $50 billion/month which would continue into the early part of 2015. They also stated that they believed the Fed would not raise interest rates until 2016.
So which report are we to believe? Where is the rise in REAL interest rates supposed to be coming from? Is it from the Fed which they just last week predicted would not raise rates until 2016? Is it from the Fed which is expressly focusing on keeping LONG TERM interest rates low by embarking on another round of QE for the next 2 1/2 years?
I am merely stating what these two separate reports coming within a week's time frame are saying.
It is obvious that the people within Goldman who prepared the former report were not consulted with by the people who issued today's report. This is perhaps a great way of making sure that no matter what happens, your "team" got it right.
By the way, do you not find it ironic that on the same day that Goldman issues today's report, Fox Business is reporting that both Goldman and JP Morgan are considering layoffs due to the rotten business climate?