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After recording 17.3% losses on a recommendation to buy June 2012 LME copper, Goldman Sachs has ‘reset’ its long call on the market at the December 19 price of $7,274 per tonne.
It also remains bullish on zinc despite seeing its original recommendation post a 13.6% loss, and encouraged its clients to buy the June contract at $1,891 per tonne.
“While we maintain our bullish views on copper and zinc into 2012, we are closing out our May 23 recommendations for these metals at a considerable loss, and resetting the recommendations at December 19 prices,” Goldman said in its latest note. With Goldman’s proprietary trading desk now closed, Hotline assumes the bank means that it is closing out its recommendations at a considerable loss to clients who have followed its advice.
Hotline asked earlier this year whether Goldman’s calls were driving base metal price moves, but after months of steadfast bullishness – in the face of a potential meltdown in Europe and falling demand across the globe – there are indications that the bank’s influence on the market is not what it once was.
“They’ve been bullish for about ten years now haven’t they?” one broker asked, on hearing of their continued optimism.
“I do feel some empathy for what they’re trying to do, but their influence on the market is probably on the wane,” he said.
There is still a bullish case to be made for copper and zinc, but Hotline would be surprised to find many Goldman clients still listening to such arguments with anything resembling empathy.
“Amazing! They’re resetting! I wish we all had a reset button,” one incredulous investor commented.