Merrill Lynch forecasts further upside for gold, silver prices for 2010-2012
Merrill Lynch forecasts further upside for gold, silver prices for 2010-2012
Merrill Lynch upgrades gold and silver price forecasts, based on investor demand, central bank buying, and inflationary risks.
Dorothy Kosich
June 22, 2010
www.mineweb.com
RENO, NV -
Merrill Lynch metals analysts maintain gold will hit a US$1,500 per ounce target by the end of next year as investor demand pushes gold prices higher.
In research published Monday, analysts Michael Widmer, Francisco Blanch, and Alex Tonks are predicting average gold price forecasts of US$1,200/oz this year, $1,350/oz in 2011, and $1,400/oz in 2012, up from $1110/oz, $1179/oz and $1109/oz. respectively.
"We also believe that silver has further upside and see prices averaging $18/oz, $20.25/oz and $21/oz in 2010, 2011 and 2012 respectively," they forecast.
"Our positive view on gold and silver prices is heavily influenced by the current macroeconomic environment and we believe that the following three developments will have a significant impact on these metals:
* "Central banks have eased monetary policy reflected in sharp rises of money supply;
* "Government debt has soared to make up for the private sector consumption short-fall;
* "Potential GDP growth rates have come under pressure."
In their latest analysis, Merrill Lynch noted, "ETFs have been a decent proxy for the strength of retail investor demand and these vehicles have seen substantial inflows during the past years." Recent data has shown that investors have once again started to increase their ETF holdings.
"It is also worth noting that investment demand in emerging markets like China has remained at very high levels," the analysts said. "This is partially influenced by growing real incomes, the launch of gold investment products and some apprehension over the value of other investment alternatives, such as equity and property."
"The importance of investors for the gold market will not change significantly in the coming years, in our view. Hence, we believe that a substantial part of marginal gold demand will continue to emanate from these market participants."
The analysts also suggested the economic environment is bullish for gold as loose monetary policy tends to attract investors into gold. They asserted that concerns over inflation "could bring new buyers into the gold market in the medium-term."
Meanwhile, although deflation is not normally viewed as bullish for gold, "we believe that the metal could rise on the back of it in the coming quarters," they advised.
"Keeping in mind that recent rises in gold prices were almost exclusively driven by concerns over sovereign debt in the Eurozone, we especially believe that challenges to reduce public liabilities should bring new buyers into the gold market in the coming quarters," they added. "There is also a risk that government may ultimately try to inflate debt away, which should attract gold buyers, too."
Merrill Lynch-Australia analysts Stephen Gorenstein and Anthony Kuo said Tuesday that they believe continued macro uncertainty will drive investor demand for gold.
"We believe central banks may be net buyers of gold given concerns over valuations of their securities in their portfolios," they suggested.
Re: Where are gold, silver, pgm prices going: big bank forecasts
Silver gets no respect. 21 dollars in 2012?
Re: Where are gold, silver, pgm prices going: big bank forecasts
I am going to stick with my predictions of silver finishing at $23 (or more) on December 31, 2010 and gold finishing at $1450 (or more) on December 31, 2010. Just my gut feeling speaking to me. ;D
Re: Where are gold, silver, pgm prices going: big bank forecasts
My aunt Jesse and I remember well your "gut feelings" Josey.
Recent artist's rendering of my aunt Jesse.
Re: Where are gold, silver, pgm prices going: big bank forecasts
Quote:
Originally Posted by Trinity
My aunt Jesse and I remember well your "gut feelings" Josey.
Recent artist's rendering of my aunt Jesse.
She looks very mean to me. I hope that your aunt Jesse is not too upset with me. I have blown a few gut feeling predictions in the past but I think that I will be right on this one. My gut says so. ;D
Re: Where are gold, silver, pgm prices going: big bank forecasts
Quote:
Originally Posted by 1970 silver art
I am going to stick with my predictions of silver finishing at $23 (or more) on December 31, 2010 and gold finishing at $1450 (or more) on December 31, 2010. Just my gut feeling speaking to me. ;D
i still think those are good numbers.
but given that we are dealing with highly manipulated markets i'm not sure what to count on except volatility.
Re: Where are gold, silver, pgm prices going: big bank forecasts
Quote:
Originally Posted by gunDriller
Quote:
Originally Posted by 1970 silver art
I am going to stick with my predictions of silver finishing at $23 (or more) on December 31, 2010 and gold finishing at $1450 (or more) on December 31, 2010. Just my gut feeling speaking to me. ;D
i still think those are good numbers.
but given that we are dealing with highly manipulated markets i'm not sure what to count on except volatility.
That is true gundriller. While IMO they are gradually losing control over gold and silver, The manipulators can still basically do what they want with the gold and silver markets. If the manipulators want to bring the prices down by a lot, then they can probably do so with their naked short selling. As long as JPM and others can still naked short sell gold and silver, then both of those metals will still be held hostage by these organizations. They will lose complete control eventually IMO but the only problem is that I do not know when eventually will come. The long term negative fundamentals of the dollar and the long term negative fundamentals of the financial state of the U.S. Gov't (i.e. massive Federal deficits and rapidly increasing national debt) will eventually overwhelm the manipulators and gold and silver will break free and start to go way up while the U.S. dollar will continue to go down.
Re: Where are gold, silver, pgm prices going: big bank forecasts
Quote:
Originally Posted by 1970 silver art
That is true gundriller. While IMO they are gradually losing control over gold and silver, The manipulators can still basically do what they want with the gold and silver markets. If the manipulators want to bring the prices down by a lot, then they can probably do so with their naked short selling. As long as JPM and others can still naked short sell gold and silver, then both of those metals will still be held hostage by these organizations. They will lose complete control eventually IMO but the only problem is that I do not know when eventually will come. The long term negative fundamentals of the dollar and the long term negative fundamentals of the financial state of the U.S. Gov't (i.e. massive Federal deficits and rapidly increasing national debt) will eventually overwhelm the manipulators and gold and silver will break free and start to go way up while the U.S. dollar will continue to go down.
I still don't understand why no-one calls the bluff. As it was described in the original webcast with Andrew Maguire & Adrian Douglas, the other side of the trade that the market manipulators are playing is a guaranteed money-maker - until JPMorgan defaults, if JPMorgan is unable to back their short positions with physical.
They way they talk of it in the webcast ("billions, trillions"), it sounds like you would need $100 billion to $500 billion to take the other side (long silver & gold, short dollars) of the JP Morgan trade (short silver & gold, long dollars).
With new investment vehicles like the Sprott Physical Trusts, it seems like more investors are learning to demand physical.
And from Harvey Organ's blog, it sounds like Comex' bullshit is beginning to break under its weight.
I guess when it does break, I will be surprised that it took so long.
Perhaps there have been similar instances in the past.
I guess all those central bank gold sales, which are basically bank bail-outs (as well as an opportunity for the Chosen Ones to load up on gold cheap), of the past, including the bail-out of LTCM (who had a 400 ton naked short gold position), are examples. The bank with the short has a problem, and then the central bank bails them out with some cheap gold.
But that only works for so long. As far as I can tell, the central banks are running out of gold to bail crooks out with.
Re: Where are gold, silver, pgm prices going: big bank forecasts
Quote:
Originally Posted by gunDriller
Quote:
Originally Posted by 1970 silver art
That is true gundriller. While IMO they are gradually losing control over gold and silver, The manipulators can still basically do what they want with the gold and silver markets. If the manipulators want to bring the prices down by a lot, then they can probably do so with their naked short selling. As long as JPM and others can still naked short sell gold and silver, then both of those metals will still be held hostage by these organizations. They will lose complete control eventually IMO but the only problem is that I do not know when eventually will come. The long term negative fundamentals of the dollar and the long term negative fundamentals of the financial state of the U.S. Gov't (i.e. massive Federal deficits and rapidly increasing national debt) will eventually overwhelm the manipulators and gold and silver will break free and start to go way up while the U.S. dollar will continue to go down.
I still don't understand why no-one calls the bluff. As it was described in the original webcast with Andrew Maguire & Adrian Douglas, the other side of the trade that the market manipulators are playing is a guaranteed money-maker - until JPMorgan defaults, if JPMorgan is unable to back their short positions with physical.
They way they talk of it in the webcast ("billions, trillions"), it sounds like you would need $100 billion to $500 billion to take the other side (long silver & gold, short dollars) of the JP Morgan trade (short silver & gold, long dollars).
With new investment vehicles like the Sprott Physical Trusts, it seems like more investors are learning to demand physical.
And from Harvey Organ's blog, it sounds like Comex' bullsh*t is beginning to break under its weight.
I guess when it does break, I will be surprised that it took so long.
Perhaps there have been similar instances in the past.
I guess all those central bank gold sales, which are basically bank bail-outs (as well as an opportunity for the Chosen Ones to load up on gold cheap), of the past, including the bail-out of LTCM (who had a 400 ton naked short gold position), are examples. The bank with the short has a problem, and then the central bank bails them out with some cheap gold.
But that only works for so long. As far as I can tell, the central banks are running out of gold to bail crooks out with.
Correct me if I am wrong here but if every single person that held a COMEX gold contract and every single person that held a COMEX silver contract decided to demand physical gold and physical silver respectively, then would that not call the bluff and make people realize that they did not have the gold and silver that. Like you said the central banks more than likely do not have enough physical to bail out everybody. It seems to me that with all of that naked short selling that has been going on that it would not take a lot of people demanding physical delivery break COMEX. Maybe I am wrong on that and feel free to correct me on this if I am wrong. This is a hypothetical situation that I was creating in my mind and I know that not everybody holding a COMEX contract will demand physical.
Re: Where are gold, silver, pgm prices going: big bank forecasts
interesting chart of gold's spikes when looked at on annual chart:
http://www.gold-eagle.com/editorials...ark092110a.gif
Quote:
You can see there haven't been that many large price advances, about one annually until last year. You'll also notice the biggest "surge" this year is comparatively small. In fact, you have to go back to mid-2001 to find one that didn't advance at least 20%. Meaning, we may very well be in for a bigger surge yet this year.
The average of all surges in the gold price since 2001 is 23.5%. If we hit the average, gold would spike to $1,428 in the current run-up. Note that I measured from the bottom of the surges, not the breakout point; the bottom I used in our case was $1,157 on July 28.
