It appears Goldman (together with virtually everyone else focused on physical not paper gold) has bought enough gold from its clients. Now, there is only upside.
Goldie on gold:
We closed our short trading recommendation on gold
We have closed our recommendation to short COMEX Gold, as prices moved above the stop at $1,400/toz. We have exited the trade significantly below our original target of $1,450/toz, for a potential gain of 10.4%. The move since initiation was surprisingly rapid, likely exacerbated by the break of well-flagged technical support levels. Our bias is to expect further declines in gold prices on the combination of continued ETF outflows as conviction in holding gold continues to wane as well as our economists’ forecast for a reacceleration in US growth later this year.
Explains the rip in gold this morning, and why it will continue to do so consider Goldman’s “bias” to keep buying more gold from its clients (especially since any forecasts of “reaccelerating” growth now merely spark bouts of uncontrollable laughter). Buy until Goldman says to go long.