gold bar

Gold was an outstanding loser in 2013, falling by 30%.

However, the yellow metal has rallied by around 10% since the beginning of the year.

Nevertheless, most Wall Street commodities analysts remain firmly bearish.

In a new note to clients, Goldman Sachs analysts reiterate their prediction that gold will fall to $1,050/oz within 12 months. Here’s their one-paragraph take (emphasis added):

The 2014 gold rally brought prices to their highest level since September before a more hawkish-than-expected March FOMC pushed prices sharply lower. Three distinct and in our view transient catalysts have driven this rally: (1) a sharp slowdown in US economic activity which we believe was weather driven, (2) high Chinese credit concerns, although ultimately bearish for gold demand through lower financing deals if realized, and (3) escalating tensions over Ukraine. While further escalation in tensions could support gold prices, we expect a sequential acceleration in both US and Chinese activity, and hence for gold prices to decline, although it may take several weeks to lift uncertainty around this acceleration. Importantly, it would require a significant sustained slowdown in US growth for us to revisit our expectation for lower US gold prices over the next two years. Beyond the acceleration in US activity, signs of sequentially weaker Chinese gold imports could pressure prices in coming months.

Gold futures settled at $1,327 Monday. Prices would have to fall 20.8% to get to Goldman’s target.

SEE ALSO: Wall Street’s Brightest Minds Reveal THE MOST IMPORTANT CHARTS IN THE WORLD

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Original source at: Markets | http://feedproxy.google.com/~r/TheMoneyGame/~3/HAMUdkmCCW0/goldman-gold-prices-will-fall-to-1050-2014-4

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The last of the major global financial markets will close for the year in just a few hours.  The S&P 500 started the year at 1,257, and it’s trading right around that level now.

So does this mean nothing happened in the financial markets this year?

Of course, not.  Perhaps the most surprising asset class of 2011 was US Treasuries.  Between QE2 ending and the US credit rating getting downgraded, most bond experts thought Treasuries would collapse.  But the exact opposite happened.

From Reuters chart guru Scott Barber, here’s a quick look at how the world’s major financial asset classes performed this year:

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Original source at: Money Game | http://feedproxy.google.com/~r/TheMoneyGame/~3/r6T2_yYo5eU/asset-class-2011-2011-12

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Looks like SocGen pulled a TGIF today and in response to its Corporate Market Alert, in which it asked the rhetorical question, “Fed QE ‘2.5’: gold and equities to take off again?” it answers itself quickly and to the point in just 6 simple charts. Here they are…

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Original source at: zero hedge - on a long enough timeline, the survival rate for everyone drops to zero | http://www.zerohedge.com/news/socgens-6-easy-charts-what-happens-gold-and-stocks-under-qe25

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Since last update in March 2011, quite a lot has happened. The global news empire is in trouble, Euro zone problems escalated, US Debt ceiling issues are still on the table and generally the earnings have surprised on the upside. With all of these grey swans and uncertainty, the markets have responded quite well to the price levels charted earlier in March 2011 issue. Regardless of how the news on TV may appear to be, market sentiment is not at extremes, as can be seen via AAII sentiment readings. The sentiment index is not at bullish / bearish extremes (between 25% and 45%). Therefore no caution on extremity of sentiments.


Now, let’s delve into the charts…

 

DOW


It is still in the long-term bullish channel; therefore we were looking only to buy. Initially, we were looking for buying interest around 12500 resistance. In our March 2011 newsletter we said “Next resistance is at 12500, after which any pullback should be bought with confirmation of bullish candles. Aggressive traders may look for counter trend short opportunities around that level.”

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It is kind of the fine folks who compile the Case Shiller index to finally “definitively” tell us that home prices have now officially double-dipped (or is that quadruple dipped when one adjusted for the pro forma impact of QE1 and 2?). Well, below is a chart that cuts right through the noise and semantics, and shows that when expressed in a currency that has not been battered and diluted endlessly, the true normalized value of housing is really down 80% not just since the housing peak but since the turn of the millennium.

Median home price priced in gold.

h/t Mike via chartoftheday.com

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Original source at: zero hedge - on a long enough timeline, the survival rate for everyone drops to zero | http://www.zerohedge.com/article/priced-gold-median-home-price-down-80-past-decade

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A number of Black Swan events have been ignored / killed by the markets (for the time being). Apart from Nikkei, there was no signficant follow through of selling in other markets, and dips have been bought hand over fists. Also, there have been news of significant buying of Japanese equities by western investments. Perhaps, this was among the the main reason for strong buying of Yen on 16 March 2011, rather than pure speculation or repatriation (Yen surge was later fought by G7 intervention).

Several trades were triggered based on previous analysis of January newsletter, details can be found below.

 

DOW


We had both Long and Short levels charted out, but none of them were set up. Daily chart shows that the price broke below 50SMA on 10 March 2011, but since then it has reversed and is now above both 50SMA and 20SMA. It is still within long-term bullish channel. Weekly chart showed a lot cleaner price action, after bouncing off 200SMA on weekly chart (as noticed in January newsletter), it created a doji type of candle (commonly called pin bar) and then continued the uptrend. Looking back at it, although I had weekly 20SMA as buying level, but I did not update my levels based on the movement of 20SMA. Next resistance is at 12500, after which any pullback should be bought with confirmation of bullish candles. Aggressive traders may look for counter trend short opportunities around that level.

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Click here to read the whole story or read an except below. By Allen Sykora Equities may be the key to the direction in gold over the next several months,

More: Next Big Gold Move Could Hinge On Direction Of Equities …

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It’s been a short but exciting week so far. Investors and traders are have been scratching their heads the past few days as stocks continued to bounce around giving mixed signals. But today was a clear day of short covering from oversold market conditions…

Read more from the original source: Gold, Black Gold and Equities Technical Charts

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