Worth a scan for the house view from Merril july reports on oil and gold for their 2012 projections. Some useful charts and data in each.
What comes from both reports is their 2012 bullish call on copper for 11500. These sorts of projections for copper go some way to explaining the copper miners out performance. It also makes me self consciously aware i lack meaningful copper exposure. ML calling oil a secular bull market but the price forecasts for 2012 are weak. (As an aside the professionals have consistently been right on direction but wrong on price forecasts. They have consistently under called all the commodity prices for the last 5 or 6 years.
Anyway here the reports. First oil:
Secondly here Gold:
(Update as of mid sept11 – ML’s lawyers have been in contact.. appears they are aware of this website. They have pulled copy write on us.. I’ve had to pull the link im afraid.. not to worry the standard chartered report is far better in any case which is below).
In both reports they mention the monetary supply issues but don’t dwell on this as a support for prices. Nor do they attempt any metrics on their valuations on % of financial assets. Nor do they mention any reference to fiat currency matters in terms of confidence and store of value.
As an example they include a chart of the rise in 2011 of the Chinese retail buyer of gold. A useful chart but they fail to draw any conclusions from this event. Indeed they say once the demand has been fulfilled it will likely subside without any reference to fiat currency issues as a store of value as well as the large continuing surplus of Chinese savings. (A small % of these savings on a sustained basis adding gold has a dramatic impact on gold prices). Overall useful reports but clearly written by data junkies than lack the macro view to put the evidence together as to where this is heading. Imo. Apols to ML analysts for this comment. Otherwise the raw data is very useful.
I would point to a much better report (IMO) on gold from Standard Chartered from mid June 2011. I say ‘better’ as it includes much more on monetary and fiat paper issues. Their model includes these issues and projects forward for holders of USDs to switch increasingly into gold. This generates a very different projection. Also a lot of very useful data on this secular bull market for gold inc coverage of miners.
Standard Chartered – Gold June15th2011
Rich
(3 votes, average: 5.00 out of 5)
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