As you may recall, Goldman's call to short gold set off the precipitous decline through long term support as paper gold was sold in size during the quiet trading hours.
And as gold fell through 1400 traders said Goldman was in the market buying physical bullion.
And now their short recommendation comes off.
That Goldman is called a Bank, with access to the Fed window, the subsidy of cheap government funding, and the protection of deposit insurance is a disgrace.
A footnote in history perhaps, but worth remembering.
"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."
The Land of the Blind
Paul Krugman said something absolutely remarkable today. Here is the quote:
"It’s true that few anticipated the severity of the 2008 crisis — but that wasn’t a deep failure of theory, it was a failure of observation. We actually had a pretty good understanding of bank runs; we just failed to notice that traditional banks were a much smaller share of the system than before, and that unregulated, unguaranteed shadow banks had become so important."
Paul Krugman, A Heart Breaking Work of Staggering Folly
Oh I see. You weren't wrong, you just weren't looking.
Are you kidding me? Your theory is fine, but your excuse is that you do not understand the fundamental structure of the system at the core of your work, for which you feel free to make policy recommendations?
So tell us, what other things aren't you looking at in the real world these days?
How about the widespread corruption in the banking and financial system, and the egregious manipulation in the markets? Don't you think that bears on the nature of the prescriptions which the economists are dispensing?
Economists are certainly the authors of 'heartbreaking works of staggering folly.' And in addition quite a few of them seem to have an underdeveloped sense of irony.