Where Goes Gold?

The gold trade is becoming less crowded than it was. Whether we have seen a top or there is more to go is up to you to decide.

Interestingly, Citibank believes it knows and believes gold is going higher, much higher. Here is Tyler Durden’s take on gold and Citi:

Following today’s margin call anticipating, liquidation-driven rout in gold, the weak hands are, as the saying goes, puking up blood. Which may not be a bad thing – after all, sometimes a catharsis is needed to get people away from potentially toxic paper exposure which very likely has been hypothecated repeatedly via the same channels we discussed last week when exposing the MF Global-HSBC “commingled gold” lawsuit. But what about the future? Well, nobody can ever predict it, but at least we can sometimes look at charts in an attempt to glean a pattern. Which is why we present the just released slide deck from Citi’s FX Technicals group titled “The 12 Chart of Christmas” which has some blockbuster predictions about the coming year, chief among them is without doubt the firm’s outlook on gold which they see at $2400 in the second half of 2012, and moving “toward $3400 over the next 2 years or so.” So for those looking at today’s price action, consider it an opportunity to roll out of paper exposure and into gold, because the more deflationary the environment gets, the more eager the central planning cabal will be to add a zero (which in our day and age of primarily electronic money can be done with the flip of a switch) to the end of every worthless piece of monetary equivalent paper in circulation. And that’s a 100% certainty.

More in the original article.

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