Monday, November 23, 2009 4 comments

Gold enters bubble phase



As far as I'm concerned, gold has finally entered the bubble phase. A special report on a mainstream site like MarketWatch (with 8 articles on it) probably portends to its popularity.

None of this means that this is the peak but I have a feeling fundamentals—if there is such a thing for gold—has been thrown out the window.

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4 Response to Gold enters bubble phase

Daniel M. Ryan
November 23, 2009 at 4:42 PM

Hello again, Sivaram,

I reached the same conclusion a little while ago, although on different grounds. 
As it turns out, I couldn't stay away from the gold market.

Sivaram Velauthapillai
November 23, 2009 at 7:54 PM

Hey, how's it going? I see that you are still following investments to some degree :)

It's not quite in the mania phase but gold is definitely not cheap. We'll know the final verdict within 2 years. The rate that the hedge funds are ploughing into gold, they will run out of money soon.

Of course, I could be wrong and we may end up with high inflation, in which case gold won't look so overvalued...

Daniel M. Ryan
November 23, 2009 at 8:30 PM

I'm still ticking along. I hope all's well with you.

Tp be honest, I think an episode of high inflation will trigger a huge mania. Inflation was still at double digits when the late-'70s gold bubble popped in 1980.

MrParkerBohn
December 11, 2009 at 5:06 AM

Perhaps its cliche to quote Buffett, but this pretty much sums up my opinion of gold:

Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head. - Warren Buffett - Harvard, 1998

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