Lately been seeing a lot of "analysts" stating gold is in a bubble.
These guys firstly clearly don't understand the underlying sick fundamentals that is driving the golds price.
A bubble is when a price just goes up and up and up. Gold has never done that. Its gone up then corrected along its journey and sometimes consolidated over a period of time before heading up again. Bubble mentality doesn't behave like that.
If its in a bubble we would see producing gold mining companies, maybe even including exploration ones share price sky rocketing. However some are trending up at a conservative rate and others just consolidating.
If its in a bubble we would see a run on physical gold and silver. With such unprecedented huge markets that didn't exist before, ie India and China for starters there would be supply issues. There isn't. I was in The Perth Mint a few weeks back and asked if they have ever run out of gold/silver bullion. The response was a flat no and never even come close to it.
If its in a bubble we would see most fund managers exposing their capital to it. We aren't seeing that yet. Marc Faber, when doing his talks at seminars etc always asks if the fund managers in the audience have exposed at least 5% of their capital to gold. He reckons he never sees a hand.
I feel though the price is going to go a little silly over the next 12mths. But thats ok, we'll just see a serious correction and it will continue up. The sovereign problems out there are huge and ain't going to go away anytime soon. They'll continue to throw everything at it which will continue to fuel gold.
The gold price is only just getting going!
GOA Price at posting:
3.2¢ Sentiment: Hold Disclosure: Held
