Gold to Rise 8% To 15% A Year – Citigroup

Citigroup’s Morse was bearish on the outlook for most commodities except for the precious metals of gold, silver, platinum and palladium.

Today’s AM fix was USD 1,734.00, EUR 1,354.05, and GBP 1,089.06 per ounce.
Yesterday’s AM fix was USD 1,723.25, EUR 1,349.66, and GBP 1,083.67 per ounce.

Silver is trading at $33.21/oz, €26.02/oz and £20.94/oz. Platinum is trading at $1,580.10/oz, palladium at $638.90/oz and rhodium at $1,055/oz.

Gold climbed $20.20 or 1.18% in New York yesterday and closed at $1,732.10. Silver surged to a high of $33.205 and finished with a gain of 2.7% while oil surged 2.6%.

Global Commodity Prices & Data – (Bloomberg)

Gold is flat today and appears to be consolidating on yesterday’s gains. Conflict in the Middle East and Moody’s downgrade of France’s AAA rating will support gold. Indeed, the Moody’s downgrade of France shows how the global debt crisis is spreading to Europe’s core with obvious ramifications for the euro.

Oil prices surged yesterday as violence intensified in the Israel-Gaza conflict, sparking fresh concern about supplies from the crude oil rich Middle East should the conflict escalate and engulf other Middle Eastern nations such as Syria and Iran.

New York’s main contract, West Texas Intermediate (WTI) for delivery in January, soared 2.6% or $2.36 from Friday to settle at $89.28 a barrel.

This is strengthening safe haven demand for gold bullion.

The Greek parliament approved laws yesterday to enforce budget limits and guarantee privatization proceeds will be used to repay debts before the Eurozone Finance Minister’s meet today about Greece in Brussels.

Ultra loose monetary policies continue to support gold. The Bank of Japan is expected to keep its monetary policy unchanged today which should see the yen continue to weaken against gold.

Australia’s Central Bank said it may further cut interest rates but will leave monetary policy unchanged in November.

US Federal Reserve Chairman, Ben Bernanke is speaking at the Economic Club of NY on “The Economic Recovery and Economic Policy” at 1715 GMT.

Cross Currency Table – (Bloomberg)

Citigroup’s Global Head of Commodities Research, Edward L. Morse, spoke to reporters yesterday and said that gold can continue to rise 8-15% per year based on central bank purchases and despite the end of the commodity “super cycle”.

“It is now clear that the commodity super cycle is over,” Morse was reported as saying by Bloomberg. “No longer will a pure long-only strategy bring the returns expected in 2002 to 2008. Nor will conditions approximating those of the last decade return any time soon.”

The “super cycle” of commodity price gains has finished as China’s economy moves to slower growth and supplies increase.

Prices won’t climb “sharply” higher even though quantitative easing from global central banks lift growth and bullion demand rebounds by the end of 2013. Returns will be more “differentiated” among raw materials depending on supply- demand balances wrote analysts at Citigroup Inc.

The Standard & Poor’s GSCI Spot Index of 24 raw materials, which has increased nearly four times since2001, is up just shy of 1% this year evidenced by sluggish growth in global economies including China, the world’s biggest consumer of cotton, soybeans and copper.

Citigroup’s Morse was bearish on the outlook for most commodities except for the precious metals of gold, silver, platinum and palladium.

8 comments on “Gold to Rise 8% To 15% A Year – Citigroup
  1. Bruce says:

    Citibank = the pillar of trust
    May I interest you in some of our offers?

    Citibank Dining Program
    Welcome to our new ambassador – Gary Mehigan, Chef/Restaurateur

    ‘It feels great to be ambassador for such a great program. Citibank’s Dining Program means you can enjoy a great night out with a free bottle of award winning wine. Free wine? I’ll drink to that!’

  2. John says:

    @ Max & Stacey – I don’t know how you can protest at banks suchas Citi Group, Barclays, Lloyds etc. for being mistrusting *****holes and then refer to their analyst predictions at the same time. It just doesn’t sit well at all.

  3. Bruce says:

    Let’s grab some headlines from our friends at Goldman Sachs. In all fairness, I’m sure similar things can be done with other forecasters too, even those “on our side”.

    (March 30 2012 forecast)
    Goldman Sachs forecasts $1,940/oz gold, cuts commodities traders – GOLD NEWS – Mineweb
    Goldman Sachs has reiterated its constructive outlook for gold prices this year and its 3-month, 6-month, and 12-month forecasts of $1,785 per ounce, $1,840/oz and $1,940/oz respectively.

    (May 2012)
    Goldman Stands By Gold-Rally Forecast Even as Price Drops – Bloomberg

    (September 2012)
    JPM and Goldman See $1,800/oz Gold By Year End – Iran, Middle East and Inflation Risks Cited | ZeroHedge

    Reality check:
    (according to the first forecast earlier in the year, 2 out of 3 forecasts have been wrong, though gold did very briefly flirt with 1,780+, it has come nowhere near 1840 at any time of this year, let alone in the time period Goldman forecast, and much of the year it’s been quite low)

  4. daddy warbucks says:

    As gold rises, are you paying attention to what your elected public officials are doing?
    -got property?

    This is not only happening in the USA:
    One major reason why it’s better that USA ‘federal government’ stick to it’s original constitutional mandate and not take control of state’s rights and responsibilities:

    One ‘federal’ dollar spent costs 10 times more than a similarly spent ‘state’ dollar simply because of the necessary added bureaucracy (agencies salaries, benefits and pensions, office complexes, information/documentations systems, vehicles, energy/maintenance costs, etc), also the more complex the bureaucracy the easier it is to siphon off or redirect money for ideological or corrupt purposes. This happens with every new ‘federal’ program. These expensive agencies produce nothing and generate no revenue. Now imagine what an international or ‘world’ dollar would need to cost you (your higher taxes -absolutely) to regulate ‘you’ and your private property by foreign national technocrats. Do we really want to hand all sovereignty over to the UN to regulate the world and us?

    DEMOCRATS AGAINST U. N. AGENDA 21 – OK, So what is Agenda …

    Democrats to Stop Agenda 21. We are making common cause with others to end UN social engineering and communitarianism.

    ‘ What Is Agenda 21? After Watching This, You May Not Want to Know’
    “sustainable development is not what you think”

    QE3 -the Fed will be buying $40+ BILLION mortgage backed securities, current private property mortgages every month, open ended, until the government owns ALL mortgaged private property. Do you think the federal government will then not hand it over to the UN, like they did with ALL your water systems, parks and airports? For those that own outright their property; they will regulate, fee, tax and fine you, until you give it to them or they create a reason to confiscate it from you thru eminent domain or charging you with a crime, one way or another.
    There cannot be a serious discussion of ‘property rights’ without including Agenda 21.

    Google: the American Policy Center (APC) and follow the battle to stop the UN’s Agenda 21.
    Agenda 21, domestic drones, surveillance cameras, EPA, DOE, etc. it’s all connected, think the main stream media would tell you what’s going on?

    Read it until it sinks in:

    “We are grateful to the Washington Post, the New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years….
    … It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national determination practiced in past centuries.”
    – David Rockefeller, Bilderberg Meeting, June 1991 Baden, Germany

  5. Hardcore Uproar says:

    Citigroup say buy, it must be time to sell!

  6. Bev says:

    Not exactly on topic. But, perhaps very important.


    SEC Rocked By Lurid Sex-and-Corruption Lawsuit


    A Children’s Treasury Of Things In New SEC Lawsuit That Are More Hilarious Than Its Sex Triangle

    by Kris E. Benson


    Some of the computers at issue were used in every stock exchange in the United States, and therefore exposed exchanges to infections or compromises that could be brought from exchange to exchange…

    Some of these laptops were brought to foreign countries by SEC management, and by certain SEC management and employees to the “Black Hat” Conference in Las Vegas, Nevada.

    Many of these unsecured laptops were probably brought to a hacker convention in Vegas.

    PAGE 36:

    The “Black Hat” Conferences are infamous for the illegal activities that occur during the Conferences. In an August 4, 2009, CNN article describing these conferences, the author notes, “[a]t a hacker conference no one is safe.” Indeed, senior IT security personnel at the SEC had acknowledged to Weber as part of the investigation that they were themselves too afraid to attend this Conference.

    a. During the 2009 Conference, websites belonging to security researchers were hacked and passwords, private e-mails, and other sensitive documents were released on a vandalized website.

    b. During the 2008 Conference, a thumb drive that was passed around by attendees was found to contain a computer virus.

    c. During the 2008 Conference, some attendees, themselves security experts, who used the Wi-Fi networks had their passwords “sniffed” and then posted on an electronic bulletin board called the “Wall of Sheep.” One “Wall of Sheep” participant remarked how surprising it was that so many Black Hat attendees were insecure.

    d. Also during the 2008 Conference, three French reporters were caught hacking into the press room network.

    It’s cool though. No big deal.

    PAGE 38:

    When Weber questioned the SEC examiners as to why they would bring their laptops, containing extremely sensitive information, including the architecture and trading engines of the major stock exchanges, to the Black Hat Conference, they replied to the effect that they didn’t “think it was a big deal.”

    So what happened, in the end, after this Weber guy became absolutely panicked at the thought of SEC employees or contractors, who may or may not have been given security clearance, taking unsecured laptops to a hacker convention in Vegas filled with foreigners, networking experts, and French reporters? Weber was canned, and forcibly escorted off SEC property.

    But it’s cool, we’ll just hope that none of this stuff is true and all this personal financial information — as well as the integrity of the stock market — is ok.

  7. Any forecasts on how much Du German’s Tungsten in New York is foretasted to rise? … Du Merkel should hire John Nadler for his expert opinion.

  8. ZORRO - London says:

    The level of gold price will be kept where the current banking alliance wishes to keep it, by continuing to flood the market with fake paper gold certificates.

    As we know, there is no credible regulatory enforcement at the moment, so these projections of price increase are unrealistic.


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