They seek him here, seek him there. His clothes are
loud, but never square...
Funny. Because I've been trying to find a pair of trousers
with a slight flare – anything, in fact, to escape the tyranny of 'jeggings'
now ruling fashion for five years or more.
But no luck. My modest aim of keeping the blood flowing in
my legs by avoiding bone-tight drainpipes seems as passé, as outdated, as
buying gold. And when it comes to gold in 2015, as SocGen concludes, "No
one wants it."
European coin and small-bar sales meantime remain strong on the latest analysis from
consultancy Thomson Reuters GFMS, while larger US investors have returned in
force these last two months based on our own data here at BullionVault.
Premiums on gold delivered into China suggest demand is turning higher in the
world's No.1 consumer nation, despite the summer shutdown in households
purchases.
No matter. Rubbishing gold is now all the rage. It's so
hip to be down on gold, in fact, that this week's headline-grabbing call for gold below $400 has already been out-done.
"Get ready for $350 gold," says a MarketWatch
headline, quoting an academic who apparently forecast the plunge in prices
back in 2012.
A proper two-handed economist then...right up until the downtrend
in gold has already lopped 40% off the price...and calling it lower becomes
all the rage.
How very fashionable. As for SocGen's flared trousers...
22 August 2011 (gold $1877, up 17% in 1
month, up 201% in 5 years)
"We believe political/economic policy inertia
with regard to debt management is likely to continue to drive physical and
paper appetite into 2012/13...We expect levels of over $2000 per ounce to be
achieved before year-end."
12 Sept 2011 (now $1834, down 4.5% in 1
week from $1920 peak)
"Buy gold on dips...likely to reach fresh
all-time record highs before year-end."
11 Sept 2012 (down 10% in 12 months to
$1736; ETF holdings set new records)
"We remain bullish all precious metals and gold
remains the safe choice..."
19 Dec 2012 (slips to $1665, middle of
2011/12 range; ETFs set new records)
"Gold – a buying opportunity."
20 March 2013 (gold $1607, down 16% from
peak 18 months earlier; ETFs shrinking)
"Short gold rallies as bubble is in the process
of deflating."
19 July 2013 (now $1295, up 9% from
end-June's crash low; won't set another new low until Nov. 2014; about to
rally another 10%)
"The rebound developing since $1180 looks
corrective...H&S [pattern] forming...down trend is to resume soon."
Unfair? Maybe. A random selection most certainly, and all
from a huge organization with many differing views and analysts.
But the point isn't that SocGen called gold wrong at the
top, nor that it called the 2013 gold crash a good three weeks in advance,
providing a very smart tip when its trading clients needed it most. The point
is that investment banks, and the headline stories which their analysts help
fill, tend to reflect what has become fashionable, rather than setting the
pace or changing tastes.
That great tip in March 2013 to sell gold, for instance,
came before Goldman Sachs said the same, but after Credit Suisse
announced what it called the end of the era of gold. By the time that crash found
its floor at end-June, the entire industry was bearish. How could it not be?
Of course, the current bearishness sounds like a screaming buy signal to some mining-stock
tipsters and fund managers. But as investment legend Warren
Buffet said in 2011 – trying to dismiss the bull market in gold which
he'd so famously ignored for more than 10 years – "As 'bandwagon'
investors join any party, they create their own truth, for a while."
The bandwagon in gold is now rolling ever-more bearish.
That could prove self-fulfulling for a while longer yet. Right up until it's
no longer true.
Longer-term investors holding a little gold as insurance
meantime won't care much either way. Style never goes out of fashion.
