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SideShowMel0329 (32.82)

Nice writeup on the gold bubble

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March 12, 2009 – Comments (8) | RELATED TICKERS: GLD , GOLD , GG

http://econompicdata.blogspot.com/2009/03/ready-to-ride-golden-bubble.html

Here's a short blog write-up on the gold bubble, which lists some short, simple reasons as to why gold is overbought.

Make sure you look at this link he provides, saying that U.S. Q4 Gold Jewelry Demand Down 35%

Gold's demand is down! It's drawing value from speculative overbuying, NOT real, consumer demand. Ignore those goldbug CAPS members. There are others out there who believe gold is on a bubble (even members with 99+ scores!)

 

 

8 Comments – Post Your Own

#1) On March 12, 2009 at 8:16 PM, BradAllenton (31.89) wrote:

I spent some time yesterday working on gold. I think it could be ready to roll over, BUT it is tracking in a range where the next few % points will tell the tale. I'm not ready to take a position on it, just waiting for a clear tell.

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#2) On March 12, 2009 at 9:36 PM, TTLump (< 20) wrote:

"... the value in gold is supposedly its beauty ..." - pretty much sums up the reasons why you should ignore the first article cited.

the second article cited actually makes a strong case for Gold as an excellent investment right now, and a hedge against both market turmoil and potential future inflation, in SPITE of falling industrial and jewellry demand ... it seems the poster must have stopped reading the article as soon as he read the part "U.S. Q4 Gold Jewelery Demand Down 35%".

Buy Gold. Yes you may have to sell your Gold to buy necessities, but if that happens it will be because your paper money is worth the paper it's printed on.

 

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#3) On March 12, 2009 at 10:27 PM, SideShowMel0329 (32.82) wrote:

Except the value of gold DOES come from its beauty. Most of the REAL consumer demand comes from luxury gold spending.

Speculators treat gold like pokemon cards. It's only worth a lot to those who want it to be worth that much. But once people realize what they're doing, they'll dump it quickly, and an unlucky few will be left holding the bag.

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#4) On March 12, 2009 at 10:47 PM, BradAllenton (31.89) wrote:

You guys seem to take a position of beliefs or ideals. I just look for things to trade. I don't care where it's going as long as I can trade it either way. I'll be here waiting for a break out or break down. I welcome either way it goes.

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#5) On March 12, 2009 at 10:52 PM, falang1 (< 20) wrote:

"Speculators treat gold like pokemon cards."

Ha!  Excellent quote.  You can make good money if you recognize the bubble and don't get too attached.  I dumped all gold last few weeks.  Right now it could go up or down.  I would wait until it either breaks down past 850 or up over 1000 again.  However just because it may be a bubble doesn't mean it can't go to 5000.

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#6) On March 12, 2009 at 11:00 PM, jesusfreakinco (28.38) wrote:

Try getting gold coins right now.  They are all on waiting lists.  Why do you think that is?  Do you understand the laws of supply and demand.  Jewelry demand may be down, but investment demand for gold as a currency and hedge against armaggedon is WAY up.  You work for CRIMEX?

JFC

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#7) On March 13, 2009 at 2:50 AM, SideShowMel0329 (32.82) wrote:

I'm getting at the fact that investment demand = speculation = bubble

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#8) On March 13, 2009 at 1:40 PM, jesusfreakinco (28.38) wrote:

World mints report soaring demand for gold coins Fri Mar 13, 2009 8:36am EDT 7:07am EDT LONDON (Reuters) - Mints around the world say demand for gold coins has risen sharply as interest in the precious metal soars on the back of financial instability and concerns over the inflation outlook. The Royal Canadian Mint, which produces Maple Leaf bullion coins, said it quadrupled its production capacity late last year as demand for gold and silver bullion products leapt. Gold was one of the few commodities to rise last year as turmoil in the financial sector sharpened investors’ appetite for assets seen as a safe store of value, such as bullion. Spot gold rallied to an 11-month high of $1,005.40 on February 20 as a slide in equity markets increased interest in the precious metal. Demand for physical gold products such as coins and bars has been particularly strong, traders say. The United States Mint said sales of its one-ounce American Eagle gold bullion coins rocketed to 710,000 ounces in 2008, from 140,000 ounces a year before. More…

Demand is definitely rising, but it is are off from being a bubble.  When oil was at 40 a couple years back and rose to 50 if you would have called that a bubble, you would have missed the rise to 140.  WAAAAAYY to early to call a bubble in gold. Investment demand just picking up.

JFC

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