"Analysis Without An Agenda"
Pentonomics

Why Goldman Sachs is Wrong on Gold

Wall Street powerhouse Goldman Sachs has recently reiterated its negative view on gold, which it has held for the past year. However, it is now doubling down on this view and advising clients to actually go short the metal.

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Focused Sector Performance

Here is a quick scan of the market sectors we follow. A few observations stick out to us.

  • Basic Resources had a tough time keeping up with the major indices in Q1 Unsurprisingly, a strong dollar is a difficult backdrop for resource sectors.
  • Chemicals topped the list, and these were the broad category of chemicals, not solely the Agricultural chemical widely used in fertilizers.
  • Utilities did rather poorly, although the index figures to do include dividends, which provide a substantial part of their total return…..particularly in pipelines. We feel this wide underperformance could be chalked up to natural gas prices being at multi year lows and to the wide swings in oil prices, as these trade in sympathy to energy unit pricing. Rising U.S. Treasury yields during the quarter also put pressure on dividend paying securities.

Focused Sector Performance
01/01/2012 - 03/31/2012

The returns for Indices, ETF’s and Stocks do not reflect dividends and are based on the last sale for the date requested. Data courtesy of Dorsey Wright.

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