Comments on: Is Gold Really in a Bubble?

By: Bors

Bors — Mon, 23 Nov 2009 18:08:35 +0000

It seems the gold bugs are going to keep pushing gold until the governments take it away from them. I wonder why it is that instead of screaming for reform of the Fed and demanding a strong dollar and demanding this country to get its financial picture in shape and quit borrowing our way into collapse, every one in the investor class would rather go along with the gambling mentality of Las Vegas and spend their time figuring out ways to squeeze every little bit of profit out of a system that every one seems to understand that is going down and gambling when so to be able to get out in the nick of time. Get out to what is the big question. This must be some thing to do with the nature of the species that loves to be in crisis mode permanently.

By: Playing the hand that you are dealt - Steve Cook on Disciplined Investing - InvestorsInsight.com | Financial Intelligence, Advice & Research / Investment Strategies & Planning for Individual Investors.

Wed, 18 Nov 2009 14:40:38 +0000

[...] short term notes. A look at gold versus the S&P (chart): http://www.ritholtz.com/blog/2009/11/is-gold-really-in-a-bubble/   Large caps outperforming (chart): [...]

By: arthur.i

arthur.i — Wed, 18 Nov 2009 08:47:02 +0000

I haven’t counted but it seems that half these comments are adamantly sure that gold is in bubble land and the other half just as assuredly disagree. Hm mm…what does that say?

If gold is going up I would buy it. If it is going down I would sell it. As Mr. Ritholtz has pointed out before – “optimism and pessimism are not investment strategies”…

There is a whole lot of $$$ sitting around doing nothing. People do not trust Mr. Market, Mr Bank nor Mr. Government. What are they going to do with this cash? IMO, if there ever were a time and a reason to have a bubble in gold, now is certainly a possibility.

By: Clem Stone

Clem Stone — Wed, 18 Nov 2009 03:28:56 +0000

They must have loved this chart in early 1988 too.

By: kmckellop

kmckellop — Wed, 18 Nov 2009 00:24:51 +0000

A better picture of where we are historically.

http://images.quickblogcast.com/5/3/1/9/5/169259-159135/Dow_Gold_Ratio.JPG

By: kmckellop

kmckellop — Wed, 18 Nov 2009 00:18:53 +0000

I think the more relevant ratio is the SP500 or DOW priced in money (gold)…looks like markets need a 50% haircut from here …at least.

http://www.gold-speculator.com/attachments/mark-lundeen/5006d1256417080-bear-market-race-week-106-dow-gold-silver-s-domestic-international-performance-dc4bfwv3_1535cwcgg5ft_b.png

By: catman

catman — Tue, 17 Nov 2009 23:20:30 +0000

Markets as small as the gold market tend to go parabolic at the end of a trend. I look forward to such a move, but maybe not to its causes.

By: sickmint79

sickmint79 — Tue, 17 Nov 2009 21:49:54 +0000

of course gold is in a bubble, just listen to everyone else repeating the same logic when gold was in a bubble at $400. and $500. $600 $700 $800 $900 $1000 and $1100. total bubble. why own gold when you can benefit from holding dollars and our strong dollar policy? we’ve made so many more of them than gold that it should be obvious to anyone that the large army of dollars would crush the pathetically miniscule amount of gold out there. strength through numbers baby. some fear the dollars will go crazy when they start multiplying but this is simply foolish. the fed has complete competence in soaking up excess dollars, just like everything else they do well.

By: Pat G.

Pat G. — Tue, 17 Nov 2009 21:39:23 +0000

During gold’s first “bubble” experience in the early ’80s it hit an all time high of $850 an ounce. If we adjust for inflation since then, gold would need to be nearer $2200 an ounce in order to be in “bubble” territory again. Ask yourself this, if it’s in a bubble, why aren’t governments net sellers? They continue to pound the Comex with huge short paper contracts through their banking buddies while mom and dad pay a premium (spot price) at the local coin shop to take delivery. Again today, gold rose with the USD.

My money is with mom and dad because deep down, they realize what these shysters are doing to our currencies. As I have been pounding this blog for months, it’s not only about the USD, it’s also about all the world’s currencies. Well, most of them that count anyway (G8).

By: Eric Davis

Eric Davis — Tue, 17 Nov 2009 21:23:31 +0000

You have to also take into account the effect the cold war had on the gold bugs. You also have to think that there were quite a few years of “price discovery” once gold wasn’t used for money..