By Pater Tenebrarum
Acting Man
Last week, gold’s rebound was cut short after Goldman Sachs and Morgan Stanley concurrently issued bearish reports on the gold price, which were widely trumpeted in the press (although it is such an allegedly unimportant asset class, gold gets an unusual amount of attention in the financial media — and there is almost always a bearish spin associated with the reportage. This is largely independent of whether the price is in trending up or down). It is of course de rigeur on Wall Street to hate gold, unless it is really overpriced, in which case it gets a little love out of sheer necessity.
As Steve Saville recently pointed out, it is not possible to assert that Goldman Sachs’ analysts have any special insights into the future of the gold price. Apparently they raised their gold price targets more than once when the price was just about to suffer its biggest correction of the entire bull market. In other words, they loved gold when it was trading at $1,700 and $1,800, but they hate it at $1,300. Not that this is a big surprise, but those trading on the grounds that GS issues some arbitrary price target (whether higher or lower) should perhaps check their premises.