For that last few years, critics of the gold bull run have said the bubble was about to burst. And it never did.
In fact, gold continues to make a run higher and higher.
It may be a case of a broken clock being right twice a day, but some gold critics are offering some evidence that the bubble has already inflated and, in fact, is going to pop.
For real this time.
Increased turbulence
A sure sign of a bubble breaking is increased volatility. For people who have consistently made double-digit and even triple-digit percentage gains in gold, sudden shakes and sputters can cause jitters. And jitters can turn into a panic. Gold recently had a $120 drop. This isn’t much when you consider the price is hovering around the $1,8000 range, but if the folks who bought in the $1,700 aren’t seeing the big price jumps and the investors accustomed to huge gains see those types of returns less frequently, they may be more willing to find other investments.
Gold Demand is down
Gold investing is up. Gold demand for commercial use is down. Down, like 18 percent. That’s a formula for price inequity, at the least and a bubble, at the worst.
Gold is just off of an Inflation-Adjusted All-Time High
Unless gold goes parabolic, it is nearing its all-time highs (in the $2,200 an ounce range). Prices typically resort to the mean, which means (no pun intended) that gold prices could be in for a period of decline.
Commercials
Count the gold-oriented commercials on CNBC or Fox Business or any of your other favorite business shows. In fact, count the commercials that aren’t gold related–that will be easier. Once the meme-space is saturated, demand tends to slow. This could mean that gold is nearing a top in mind space and price. Remember how many shows about “flipping houses” were on before the housing bubble?
Now for the disclaimer.
For every sign that there’s a gold bubble, a gold bull can point to proof that there is no top to the gold market. And I encourage you gold bulls out there to add them in the comments.
These are merely signs of a gold price slow down or meltdown. Not evidence.
As always, trade the trend, not the rumour.
Source: http://www.onlineinvestingai.com
No comments:
Post a Comment