Or course, there is a catch to their forecast which could make gold perform like it’s 2013 all over again…
(by Half Dollar) Never say anything good about gold.
That’s rule number one for the MSM.
If, as bad luck would have it, the MSM is forced to say something good about gold, then qualify it.
That’s rule number two.
Rule number 3?
Above all else, avoid saying anything good about silver at all costs, and only cover silver if the subject is totally and completely unavoidable.
There is a problem, however, and it’s forcing the banks to talk good about gold: Many people are protecting themselves with gold (and silver) as central banks and governments around the world stimulate their “markets” and economies to no end, and since we’ve been consolidating for months on end, it sure seems like we’re ready for the next leg-up.
That’s a problem because Goldman can no longer go all Harry Dent and claim gold’s crashing to $1000 over the course of 12 months.
But I digress.
For what it’s worth, from Reuters (bold added for emphasis and commentary)
June 19 (Reuters) – Goldman Sachs raised its gold price forecast on Friday as it expects a rally in bullion to continue due to currency debasement fears and economic uncertainty caused by the coronavirus crisis.
The bank raised its three, six and 12-month gold price estimates to $1,800, $1,900 and $2,000 per ounce from $1,600, $1,650 and 1,800 per ounce, respectively.
Curiously, that could be loosely interpreted as Goldman’s CYA sentence by indirectly implying the possibility of record high gold prices, possibly this year.
Granted, if you’re buying real, physical gold and not some crappy ETF that may or may not have the gold in it and will cash settle you anyway when prices run parabolic, then you’re already likely paying record high prices or very near record high prices.
But there I go again.
Needless to say, onto the catch: Inflation.
Because everybody knows the Fed’s balance sheet is not inflation, and everybody also knows inflation has been stubbornly under 2.0% for decades now.
The U.S. bank warned that prices are likely to correct in a similar manner to 2013 if inflation doesn’t return as the global economy recovers.
Here’s the question: Does the government and the Fed understate inflation?
Follow up question: Inflation aside, what if the global economy doesn’t “recover” in the next 3, 6, or nine months?