"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Wednesday, March 28, 2012

Goldman Sachs issues "Buy" on Gold; Gold drops lower

Interesting recommendation by Goldman and even more interesting to see the market reaction in gold today. Can you say that someone is particularly overjoyed by the opportunity to take that recommendation?

By the way, Goldman is echoing the remarks from Chairman Bernanke the other day and repeating what my interpretation of those remarks were in this week's comments entitled, "Pass the Juice Please".

Goldman's views in summary can be translated as follows: Gold market weakness has been tied to the fact that the markets were expecting "REAL INTEREST RATES" to rise in light of the recent economic data showing improvement in the US economy. However, the economic recovery is not strong enough to allow for higher rates and that coupled with Bernanke's comments that acccomodative monetary policy will be required for the foreseeable future means that gold has overreacted to the downside.

Goldman is looking for another round of QE which will pressure the Dollar and thus drive gold prices higher.

Rest assured that the hedge fund long liquidation and fresh short selling of today is being met by solid buying from Goldman's customers.

Also, I find it EXTREMELY TELLING that the bond market cannot seem to get much going to the upside today given the fact that the broader equity markets are swooning and the US Dollar is currently higher as the risk aversion trades come back on.


  1. Goldman recommendations to their have become the new contrarian indicator. However, goldman would never make it that easy - they likely throw the occasional bone to clients. This may or may not betray the squid's book

  2. I am not sure if Goldman's recommendation this time is contrarian to their underlying intention (again). However, with the signal of QE3 getting stronger and stronger, you got to find the seatbelt of commodities now. Let's see on June.

  3. Goldman is finally hearing noisy footsteps of regulators, class-action lawsuits, and a bloodsucker reputation that will hurt its pocketbook eventually, if not already. Money grubbers seem to act in their own self-interest first and foremost, and even a Third Graders could come up with this call since sovereign debt defaults and systemic banking failures will dot the global landscape before the White House changes hands in January, 2013. GIVE THE MUPPETS A CHEAP BONE TO CHEW ON. Another Godly Act from the One Percenters.

  4. Dan,
    You mean they are lying and trying to fool their customers once again, and therefore that Gold is likely to keep going down? I'm not sure if I understand correct...

  5. Question Dan if you have time
    do you think gold ETF's (like GLd) will do okay if physical gold goes up and the market goes down or does one need to buy the physical gold.

  6. Please take a look at my recent chart worksheet that I just posted. I believe those extended trendlines are about to be realized. This is HOT OFF THE PRESS:

    The News UNIT: Silver Chart LOOKOUT for May 18, 2012

  7. To DFR: GLD has done a good job of tracking the gold price, so it should go up if physical gold does. However, many precious metals investors doubt that GLD has clear title to all the bullion that it supposedly owns. If this is ever proven to be the case, watch out.

  8. I think that in the coming future, there are more and more people are interested in this and they will appreciate highly your post today. Buy gold with Gold Buying Genie

  9. Good work,hope your blog be better!I just want to make a blog like this!
    Invest in gold with Gold Buying Genie


Note: Only a member of this blog may post a comment.