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Monday
Apr082013

Société Générale Calls The End Of The Gold Bull Market … Again

 Our friend Taki Tsaklanos sent us this article recently which we hope that you will find of interest.

Gold stabilized today in global trading in Asia, Europe and the US. It has been trading near $1,550 an ounce / €1,250 an ounce. After two successive days of what seemed to be a mechanical sell off in both gold and silver, a very significant support level has been reached. Time will tell if this support area for gold (between $1,515 and $1,550 an ounce) will hold. As for now, enough buyers have appeared to pick up the yellow metal at these prices.

In the midst of this gold price drop, Société Générale published a “special report” titled “The End Of The Gold Era.” The bank’s bearish case is documented in 26 pages. The analysis resulted in a gold price prediction of $1500/oz  over 2013, and $1375/oz by the end of the year. It is worth taking the time to read through the document mainly to understand how a big financial institution looks at gold. That’s why we have added it to our public library and embedded it at the bottom of this article.

Interestingly, gold is literally on fire today in Japan (click to see the yen gold chart). Yen gold is up 3.3% after the announcement of the Bank of Japan to stimulate their economy with $ 1.4 trillion in the next 24 months. The operation is unprecedented in scale, surpassing the US Fed’s monetary bazooka. As a result, the Yen was hit hard; the euro and US dollar have strengthened against the Yen.

Click here to read this article in full.

With gold, silver and Uranium stocks being out of favor one must decide if this is a problem or an opportunity. We have steadfastly refused to buy gold and silver mining stocks for the last two years and as evidenced by the HUI we feel that our decision to hold back has been vindicated. The damage done to the mining sector may not be over yet but this demise is starting to offer up some exciting opportunities in my view.

Great care will be needed in the selection process in order to generate a reasonable profit and that’s where our new venture begins. ‘Stock Trader’ has begun trading on behalf of ourselves and our much valued subscribers, all exciting stuff which we are really looking forward to, if you wish to join us then please subscribe below;

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Reader Comments (1)

Yes, the trend for Gold/Silver STOCKS is down. Yes, we should be paying attention to bottoms AND if they are met, or exceeded. But what about the Physical Market?... and those pesky premiums. They have been rising, and availability seems to be spotty, but firming up. Finally, there is the inflation factor... which differs among Countries.

When you account for these factors... a different picture emerges. People MAY be dumping their stocks & ETF's, but how about their "Stack" (of Physical)? Then again, the Banks are still buying, not that they haven't made mistakes in the past, or so we are lead to believe. Still, they are accumulating, so we can safely assume that lower prices won't dissuade them. Assuming they know or see something...

Shouldn't we do the same?

April 9, 2013 | Unregistered CommenterMaxx

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