Gold to drop in Q1, far from retesting record high

Discussion in 'General Discussion' started by Quigley_Sharps, Dec 18, 2011.

  1. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member

    NEW YORK (Reuters) - Gold prices will fall below $1,500 an ounce over the next three months and are unlikely to retest September's all-time highs until later 2012 at the earliest, according to a Reuters poll of 20 hedge fund managers, economists and traders.
    The bleak forecast, coming after gold has lost 11 percent of its value so far this month, is likely to fuel fears that bullion is close to ending its more than decade long bull run and entering a bear market.
    Almost half of respondents predicted bullion will fall to 1,450 an ounce in the first quarter next year, with three seeing prices as low as $1,400 an ounce.
    The forecasts come after a dismal performance last week when prices hit a 2 1/2 month low of $1,560 and gold lost its safe haven status.
    Selling was fuelled by a scramble by hedge funds for cash to meet client redemptions at the end of a difficult year and a run for cash by European banks seeking to raise capital.
    "What is surprising is that in an environment where headline risk news is bigger than ever, gold has actually fallen from its highs," said Christoph Eibl, CEO and founding partner of the Swiss commodity hedge fund Tiberius.
    "We believe that, in 2012, of all metals gold will be the worst performing," Eibl said.
    The market eked out small gains Friday to trade just under $1,600, but showed little sign of strength even after a small bout of short covering took other financial markets higher.
    The precious metal is now heading for its first quarterly loss for the fourth quarter after its second-worst rout since September 2008 when the global credit crunch was at its height.
    In another immediately bearish sign, U.S. Commodity Futures Trading Commission (CFTC) figures released Friday showed that managed money in gold futures and options cut bullish bets for the second consecutive week.
    The long-term outlook is no more upbeat either, with more than half of respondents predicting that gold is unlikely to stage another run to new all-time highs until at least the second half of 2012.
    Four said they don't expect a new record until at least 2014.
    A lack of immediate monetary easing or stimulus programs by central banks has prompted money managers to turn bearish on gold even though the precious metal is traditionally considered a safe haven in times of uncertainty.
    "To me, gold is not attractive right now because we don't see any inflation threats," said Jeffrey Sherman, commodities portfolio manager of DoubleLine Capital, a Los Angeles-based investment manager with $21 billion in assets.
    Gold has increasingly moved in tandem with risky assets such as equities and industrial commodities. But gold broke ranks last week with a 7 percent decline, which dwarfed a 3 percent drop of the S&P 500.
    Bullion's plunge below its 200-day moving average, which it had held for nearly three years, prompted a prominent market watcher to call an end to gold's decade-long bull cycle.
    "We have the beginnings of a real bear market, and the death of a bull," said veteran trader Dennis Gartman, a long-time gold bull who completely exited his bullion investments last week.
    Since September, gold has underperformed commodities measured by the RJ/CRB index and the euro, while U.S. equities measured by the S&P 500 eked out a slight gain.
    (Additional reporting by Claire Milhench, Harpreet Bhal in London and Rujun Shen in Singapore; Editing by Jon Loades-Carter; Josephine Mason and Andrea Evans)
  2. Seawolf1090

    Seawolf1090 Retired Curmudgeonly IT Monkey Founding Member

    Gonna PO those who bought it at $1800 an ounce....... :D
  3. gunbunny

    gunbunny Never Trust A Bunny

    Any bets he's buying gold like there is no tomorrow.
  4. Falcon15

    Falcon15 Falco Peregrinus

    Any news story from Reuters, especially one predicting precious metals pricing, should be resoundingly ignored. First, they are talking about a paper fiat price. Second the used feminine hygiene flush bag is one of those jerks that cost many an American their shirts in the housing bust. His hedge fund, Tiberius, swapped over to the derivatives market in 2010 and would make a crap ton of money if Gold did tank because they carry 488,851,589 Euros in short positions in Gold etc., and right now are losing money.

    Caveat Emptor, remember the fundamentals.
    Sapper John likes this.
  5. UGRev

    UGRev Get on with it!

    all that means is that you back the truck up and load up.. BTFD.
    Sapper John and Falcon15 like this.
  6. Falcon15

    Falcon15 Falco Peregrinus

    IF you can find the physical. My local dealer, who has never, ever, been low on stock, was completely wiped out. Days to weeks to get new in. He has plenty of "junk" silver coinage, but no bullion - gold or silver - in his shop. It goes out the door almost faster than it comes in. He is selling by the order now. He has no clue when he will be able to catch up, other than he said he might catch a break around Christmas. Might. Something tells me, call it a hunch, that he won't catch any break.
    Sapper John and Cephus like this.
  7. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    Just in time for the finalization of my self-directed IRA rollover that allows me to invest into physical metals unlike managed iRAs or into real estate for that matter.
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