Gold Sales From Soros Reveal 12-Year Bull Run Decay: Commodities – Bloomberg 03-12-13

Salient to Investors:

Investors sold $5.4 billion of gold ETFs in February, the most since their creation in 2003.

Credit Suisse and Barclays say the 12-year gold rally will peak in 2013. Credit Suisse said gold is significantly overvalued and unlikely to return to its September 2011 record of $1,921.15. Credit Suisse, Barclays, Societe Generale, Natixis, BNP Paribas, ABN Amro Bank , Danske Bank and TD Securities are predicting lower average prices in 2014 than in 2013.

George Soros reduced his stake in the biggest ETP by 55 percent in Q4 2012. Prices are within 5 percent of a bear market after the longest run of monthly losses since 1997.

Hedge funds et al are their least bullish since 2007. 8 of 13 analysts expect lower average gold prices in 2014 than in 2013.

John Toohey at USAA Investments said there is a belief that the world economy is improving, especially in the US.

Goldman Sachs reduced its 3-month forecast to $1,615 and expects $1,550 in a year.

Louis Moore Bacon sold his firm’s stake in the SPDR fund and cut holdings in the Sprott Physical Gold Trust by 53 percent in Q4 2012.

John Paulson maintained his SPDR holding in Q4

Morgan Stanley said central bank asset buying won’t end any time soon and concern about currency debasement combined with rising expectations for inflation will spur demand for gold. The median analysts estimate a record annual average of $1,700 in 2013, falling to $1,638 in 2014.

Michael Cuggino at Permanent Portfolio Family of Funds said just because it feels that the economy is improving does not necessarily mean it is.

Gold priced in yen rose 5.7 percent in 2013 and 4.1 percent in in British pounds.

The World Gold Council said central banks added the most gold reserves in 2012 since 1964. Barclays forecasts 300 tons of buying in 2013 and again in 2014.

Kenneth Hoffman et al at Bloomberg Industries says mining costs have risen more than fivefold since 2003. Production costs averaged $991 an ounce in the first nine months of 2012 for 11 of the world’s biggest miners.

Michael Mullaney at Fiduciary Trust said the end of loose money supply is making gold less attractive.

Read the full article at http://www.bloomberg.com/news/2013-03-12/gold-sales-from-soros-reveal-12-year-bull-run-decay-commodities.html

Click here to receive free and immediate email alerts of the latest forecasts.