Top Sell: Gold equities
• On a relative basis, we believe gold equities will underperform other cyclical equities. We believe the price of gold is likely to be range bound for the following reasons:
— One of the key drivers, its defensive status, is no longer attractive given the backdrop of a recovery in the global economy.
— The US dollar, another key driver, has dropped 13% from its recent high, which is largely priced in, in our view.
— We forecast the price of gold in 2010E to be US$964/oz.
Goldman not only has some disagreements with the macro hedge funds, but also has a disagreement with Paulson & Co….