Goldman’s Currie still looking for $1050 gold, bearish on all commodities – by Lawrence Williams (Mineweb.com – January 15, 2014)

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Goldman Sachs’ Jeffrey Currie remains bearish on virtually all commodities, but particularly so on gold reiterating his prediction of last year that gold will fall to $1050 by end 2014.

LONDON (MINEWEB) – In a new interview with CNBC, Goldman Sachs Head of Commodities Research, Jeffrey Currie, was nothing but consistent in his 2014 gold price forecast and is sticking to his $1050 target for gold by end 2014 – a figure he first came up with in the first half of last year. Thus he feels that gold’s relatively strong start to the current year is likely to be shortlived and, as in 2013, gold will likely shed value throughout 2014.

Now, the principal problem for gold bulls with Currie’s forecasts is that they can tend to be self-fulfilling prophecies given the God-like status of Goldman Sachs in financial markets. Currie famously told clients to sell gold short in April last year – just two days before many big gold investors seem to have followed this advice and the gold price plunged.

Later in the year, in October, Currie told a conference panel in London that gold had to be a ‘slam dunk sell’ with the U.S. Fed likely to begin its tapering programme and reduce its $85 billion a month bond buying programme once the then prevalent budget impasse ended. This too generated gold price weakness, although perhaps not to the extent of his earlier ‘short gold’ call.

But Currie’s theme has all along related gold weakness to recovery in the U.S. economy which he thinks is headed strongly upwards and will enable the Fed to continue its tapering programme and gradually cease pushing more and more liquidity into the economy.

Assuming the Fed can do this without upsetting the growth in general markets – which some feel may crash as stimulus is withdrawn – then Currie could have a point, although some indicators, like the recent U.S. jobs growth figures which came in way below expectations, could dent both the Fed’s and the general public’s confidence in ongoing economic growth. But, the latest job figures are so puzzling to most observers that they may well be just an irrational blip and future announcements will see a return to more normal figures in line with such economic growth that there may be.

Meanwhile though, Currie appears to be bearish on all commodities – not just on gold. Speaking in London at a Goldman Sachs investor seminar, he noted “I can’t tell you about one commodity out there that has a bullish supply-side story”.

Indeed he went much further commenting “the rotation away from emerging markets and towards developed market demand as well as the supply increase, particularly the US shale revolution, are creating a new commodity cycle”, which “eventually suggests a structural bear market in commodities”, though Goldman Sachs believes that to be “still in the distant future”. – according to Bloomberg.

Currie bases his observations on what we have described before on Mineweb as the regular cyclical price and supply/demand patterns that tend to afflict the mining/commodities sector.

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