According to the media, the expectations that the Federal Reserve would raise interest rate is pushing commodities down due to the rising value of the US$.
We have economists and analysts saying that this is the beginning of a tightening cycle. Gold has lost its shine as it does not earn its investors any dividends or interest.
We have Goldman Sachs predicting that the Federal Reserve will raise its rate in December followed by a 100 basis point increase in 2016 and gold will fall to US$1,000 per oz.
Some even predicted that gold will fall below $1,000 per oz in 2016. The bearish signals are rather overwhelming.
Then incredibly, on 10 August, Speaking Alpha reported that on 6 August, Goldman Sachs bought 3.2 tons of gold while HSBC bought 3.9 tons. Both purchases were recorded as being for the benefit of the banks' own house account.
It leads one to wonder why the bearish call from Goldman Sachs when they are urging traders to sell gold. Reminds me of the CDOs fiasco back in the 2007-2008 period.
Incidentally, while traders have been most bearish on gold, Russia and China have been steadily accumulating as well. Now if gold is going to be worthless, one also wonders why the central bank of both countries are buying gold.
Link http://www.bloomberg.com/news/articles/2015-10-22/fed-getting-started-on-rates-will-hurt-bullion-goldman-predicts
Link: http://seekingalpha.com/article/3421396-the-big-long-goldman-sachs-and-hsbc-buy-7_1-tons-of-physical-gold
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