Sachs' Shifting Golden Advice
Source: New York Post, Mark DeCambre (8/19/10)
"[We've] shifted our stance on gold after years of being long."
In a report this month, GS Asset Management advised high net-worth clients to dump gold.
"[We've] shifted our stance on gold after years of being long," the report said. "We see gold as being vulnerable to central bank inactivity in the face of rising deflation risk."
That conflicts with a widely circulated report released this month from two of the firm's PM analysts, who maintain that gold prices are on the rise and will hit $1,300/oz. in the next six months.
A Goldman spokeswoman noted that conflicting reports within the same bank aren't unusual. "It's not uncommon for different areas of the firm to have different investment perspectives," she said.
Still, the dueling research reports come at a sensitive time for Goldman, which is trying to repair its reputation after settling an SEC suit that centered on client conflicts of interest.
Last month, Goldman agreed to pay a record $550M penalty after the SEC accused it of selling mortgage-related securities to clients that were rigged to fail.
For critics of Wall Street, the suit seemed to confirm fears that Goldman didn't care what it told clients so long as it profited.