Comments on: Is the gold bubble about to burst? http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/?utm_source=rss&utm_medium=rss&utm_campaign=is-the-gold-bubble-about-to-burst Views about the Australian stock market, shares, the economy, investing, politics and world events. Fri, 10 Feb 2012 09:23:14 +0000 hourly 1 http://wordpress.org/?v= By: Ned S http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-4106 Ned S Fri, 14 May 2010 10:50:23 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-4106 I feel a bit like those martians scratching their heads that Buffett mentioned. I feel a bit like those martians scratching their heads that Buffett mentioned.

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-4103 Greg Atkinson Fri, 14 May 2010 09:38:19 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-4103 Over the last few days I have not seen one analyst, fund manager or market commentator on Bloomberg be anything but bullish about gold. That suggests to me that gold prices are indeed in a bubble! I am hopeless at timing the market, but I wager that gold prices will fall below $1000 USD an ounce before October next year or I will name a venue and shout the beers for a few hours! Remember that despite the gold bulls talking about record levels of gold consumption, what this actually means is that record amounts of gold is being put into vaults. Most gold isn't being "consumed"... it is being stored! Nobody seems too concerned about what an ounce of gold is worth anymore, am I the only one worried about that? Over the last few days I have not seen one analyst, fund manager or market commentator on Bloomberg be anything but bullish about gold. That suggests to me that gold prices are indeed in a bubble!

I am hopeless at timing the market, but I wager that gold prices will fall below $1000 USD an ounce before October next year or I will name a venue and shout the beers for a few hours!

Remember that despite the gold bulls talking about record levels of gold consumption, what this actually means is that record amounts of gold is being put into vaults. Most gold isn’t being “consumed”… it is being stored!

Nobody seems too concerned about what an ounce of gold is worth anymore, am I the only one worried about that?

]]> By: Ned S http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-4098 Ned S Thu, 13 May 2010 14:49:30 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-4098 Interesting perspective - Gold's an inflation hedge that is also benefiting from a flight to safety in both USD and Gold itself: http://seekingalpha.com/article/204718-reading-into-the-simultaneous-rise-in-gold-and-the-u-s-dollar?source=email Which is all nice. But when it comes right down to it, I simply don't have any especially great use for it that I can think of. More fool me maybe? Interesting perspective -- Gold’s an inflation hedge that is also benefiting from a flight to safety in both USD and Gold itself:

http://seekingalpha.com/article/204718-reading-into-the-simultaneous-rise-in-gold-and-the-u-s-dollar?source=email

Which is all nice. But when it comes right down to it, I simply don’t have any especially great use for it that I can think of. More fool me maybe?

]]> By: Ned S http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-4097 Ned S Thu, 13 May 2010 14:02:27 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-4097 Never heard of money printing preventing any country going broke? But maybe Japan was the exception??? Never heard of money printing preventing any country going broke?

But maybe Japan was the exception???

]]> By: Anon http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-4096 Anon Thu, 13 May 2010 13:44:23 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-4096 "Since George Soros reckons gold is getting near bubble territory I am staying clear of the stuff until prices fall well below $1000 USD an ounce." By the time that happens it might be in a major downtrend and you could be burnt trying to pick the bottom! It would go from moderately priced to value trap. I agree its overvalued ST from the EURO hype...but getting down well below 1,000$ is unlikely (caveat: then again oil went to ~30s!!) Silver looks the best value wise...historical inflation adjusted price is ~150$ + depending on the source. Will eventually move if gold keeps going parabolic. Pretty clear governments are going to blowup all over the place, over the next few years, given what has happened with this Euro debacle and stimulus packages worldwide fueled by debt/QE! Government balance sheets have gone down the gurgler. They will cut stimulus to fix the balance sheet, the economy will contract, and then they will need to borrow/qe again...rinse/repeat. Doesn't look like a good ending! Just timing entries will be very difficult. PMs are so volatile and vicious in price movements. George Soros: "I'm not better than the next trader, just quicker at admitting my mistakes and moving onto the next opportunity." Remember above not advice, just commentary, seek financial advice from a financial adviser. “Since George Soros reckons gold is getting near bubble territory I am staying clear of the stuff until prices fall well below $1000 USD an ounce.”

By the time that happens it might be in a major downtrend and you could be burnt trying to pick the bottom! It would go from moderately priced to value trap. I agree its overvalued ST from the EURO hype…but getting down well below 1,000$ is unlikely (caveat: then again oil went to ~30s!!)
Silver looks the best value wise…historical inflation adjusted price is ~150$ + depending on the source. Will eventually move if gold keeps going parabolic.
Pretty clear governments are going to blowup all over the place, over the next few years, given what has happened with this Euro debacle and stimulus packages worldwide fueled by debt/QE! Government balance sheets have gone down the gurgler. They will cut stimulus to fix the balance sheet, the economy will contract, and then they will need to borrow/qe again…rinse/repeat. Doesn’t look like a good ending!
Just timing entries will be very difficult. PMs are so volatile and vicious in price movements.

George Soros:
“I’m not better than the next trader, just quicker at admitting my mistakes and moving onto the next opportunity.”

Remember above not advice, just commentary, seek financial advice from a financial adviser.

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-4086 Greg Atkinson Wed, 12 May 2010 23:41:14 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-4086 Gold rallies well on fear so it is quite popular at the moment. But I sense by the number of people talking gold prices up that there are plenty of traders etc sitting on tidy profits and I reckon that they would be quick to sell if they sense prices will fall. Since George Soros reckons gold is getting near bubble territory I am staying clear of the stuff until prices fall well below $1000 USD an ounce. I am just not buying into the end of paper money story, sounds like a rehash of the fear campaign of 2008-2009 when apparently capitalism was about the implode! Gold rallies well on fear so it is quite popular at the moment. But I sense by the number of people talking gold prices up that there are plenty of traders etc sitting on tidy profits and I reckon that they would be quick to sell if they sense prices will fall.

Since George Soros reckons gold is getting near bubble territory I am staying clear of the stuff until prices fall well below $1000 USD an ounce. I am just not buying into the end of paper money story, sounds like a rehash of the fear campaign of 2008-2009 when apparently capitalism was about the implode!

]]> By: Ned S http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-3799 Ned S Fri, 30 Apr 2010 16:05:43 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-3799 Gold's on a roll - At least until it's not. While I feel bugger all sympathy for Greeks who cheated their way into the union and borrowed beyond their means, I do feel a good bit for Krauts who didn't and are supposed to bail them out. This socializing of the debt is all pretty seriously sick stuff! :) Gold’s on a roll -- At least until it’s not. While I feel bugger all sympathy for Greeks who cheated their way into the union and borrowed beyond their means, I do feel a good bit for Krauts who didn’t and are supposed to bail them out. This socializing of the debt is all pretty seriously sick stuff! :)

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2998 Greg Atkinson Tue, 02 Mar 2010 09:17:17 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2998 Yes I am a little lost Ned as well. But I still don't quite see the logic now of having so much gold in vaults, at some stage people have to sell it to make money as gold in a vault does not pay any income as such. Are gold investors really going to sit there will their money locked up for 10 years or more? Perhaps the really smart people are the people who will make money when gold is sold or bought at any price? Overall I think the demand fundamentals don't stack up at all. Gold is being stored and most of the gold ever mined is still around. There is no shortage of the stuff. Yes I am a little lost Ned as well. But I still don’t quite see the logic now of having so much gold in vaults, at some stage people have to sell it to make money as gold in a vault does not pay any income as such.

Are gold investors really going to sit there will their money locked up for 10 years or more?

Perhaps the really smart people are the people who will make money when gold is sold or bought at any price?

Overall I think the demand fundamentals don’t stack up at all. Gold is being stored and most of the gold ever mined is still around. There is no shortage of the stuff.

]]> By: Ned S http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2996 Ned S Tue, 02 Mar 2010 04:15:24 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2996 There's also a bit of chat going on about using special drawing rights as a reserve currency again. With one associatted thought being, Well central banks won't have any great need for gold at all if that happens. Tricked if I know? There’s also a bit of chat going on about using special drawing rights as a reserve currency again. With one associatted thought being, Well central banks won’t have any great need for gold at all if that happens. Tricked if I know?

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2995 Greg Atkinson Tue, 02 Mar 2010 03:39:20 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2995 Well I guess we are seeing the impact of the first home owners grant wear off? A bit of a worry to see a rise in government spending which now basically means more debt. As for gold, well gold exports earn a lot of dollars for OZ so if gold prices did not come down significantly that could be a nasty kick in the teeth. Well I guess we are seeing the impact of the first home owners grant wear off? A bit of a worry to see a rise in government spending which now basically means more debt.

As for gold, well gold exports earn a lot of dollars for OZ so if gold prices did not come down significantly that could be a nasty kick in the teeth.

]]> By: Ned S http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2994 Ned S Tue, 02 Mar 2010 01:41:48 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2994 Yes, if we don't start getting some more dwellings built, we are going to see some strong upwards pressures on prices. And rents. IMO. Interesting that it's apartment approvals that fell of the cliff. Gottliebsen wrote about what was coming and why back in October: http://money.ninemsn.com.au/article.aspx?id=872610 Yes, if we don’t start getting some more dwellings built, we are going to see some strong upwards pressures on prices. And rents. IMO.

Interesting that it’s apartment approvals that fell of the cliff. Gottliebsen wrote about what was coming and why back in October:

http://money.ninemsn.com.au/article.aspx?id=872610

]]> By: Anon http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2993 Anon Tue, 02 Mar 2010 00:50:21 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2993 That buildings approval data is really bad. "Building approvals, though, slumped 7 per cent for the month, compared with analysts' forecasts of a 1 per cent increase." http://www.smh.com.au/business/retail-sales-jump-approvals-slump-20100302-penf.html Remember above not advice, just commentary, seek financial advice from a financial adviser. That buildings approval data is really bad.

“Building approvals, though, slumped 7 per cent for the month, compared with analysts’ forecasts of a 1 per cent increase.”

http://www.smh.com.au/business/retail-sales-jump-approvals-slump-20100302-penf.html

Remember above not advice, just commentary, seek financial advice from a financial adviser.

]]> By: Anon http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2992 Anon Tue, 02 Mar 2010 00:46:33 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2992 You could be right Greg. Irrespective of whether it is a bubble or not, I agree, its going to end badly. Surprisingly good Retail sales; Building approvals fall off a cliff: ABS retail sales up 1.2% in January 2010: http://www.abs.gov.au/ausstats/abs@.nsf/latestProducts/8501.0Media%20Release1Jan%202010 Less dwelling units approved this month: http://www.abs.gov.au/ausstats/abs@.nsf/latestProducts/8731.0Media%20Release1Jan%202010 Remember above not advice, just commentary, seek financial advice from a financial adviser. You could be right Greg. Irrespective of whether it is a bubble or not, I agree, its going to end badly.

Surprisingly good Retail sales; Building approvals fall off a cliff:

ABS retail sales up 1.2% in January 2010:
http://www.abs.gov.au/ausstats/abs@.nsf/latestProducts/8501.0Media%20Release1Jan%202010

Less dwelling units approved this month:
http://www.abs.gov.au/ausstats/abs@.nsf/latestProducts/8731.0Media%20Release1Jan%202010

Remember above not advice, just commentary, seek financial advice from a financial adviser.

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2991 Greg Atkinson Mon, 01 Mar 2010 23:12:01 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2991 Hi Anon, actually I read more about what Soros was saying and he quite clearly said he invests in bubbles and gold is in a bubble. He believes the bubble has a way to run yet and must back himself to get out before it bursts. The reason this is so interesting is because he has made his views so widely known, which means when he sells people will take it as a sign (wrongly or rightly) that gold prices will crash. Anyway I already reckon gold is in a bubble and have though so for some time. This does not mean prices won't go up more, it just means I know I am not smart enough to sense when it is about the burst and therefore it would be far too risky for me to attempt to ride the prices on the way up. (if in fact they do go up much more from here) The crazy thing is that the investment demand for gold is now greater than the jewellery demand. Is all that gold really going to stay locked in vaults...forever? Hi Anon, actually I read more about what Soros was saying and he quite clearly said he invests in bubbles and gold is in a bubble. He believes the bubble has a way to run yet and must back himself to get out before it bursts.

The reason this is so interesting is because he has made his views so widely known, which means when he sells people will take it as a sign (wrongly or rightly) that gold prices will crash.

Anyway I already reckon gold is in a bubble and have though so for some time. This does not mean prices won’t go up more, it just means I know I am not smart enough to sense when it is about the burst and therefore it would be far too risky for me to attempt to ride the prices on the way up. (if in fact they do go up much more from here)

The crazy thing is that the investment demand for gold is now greater than the jewellery demand. Is all that gold really going to stay locked in vaults…forever?

]]> By: Anon http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2990 Anon Mon, 01 Mar 2010 13:16:52 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2990 Hey Greg, I think Soros meant it will be the “ultimate” bubble. Meaning its not a bubble yet, but if fiscal conditions/policies etc dont improve this will be the biggest of all bubbles. Hey Greg, I think Soros meant it will be the “ultimate” bubble. Meaning its not a bubble yet, but if fiscal conditions/policies etc dont improve this will be the biggest of all bubbles.

]]> By: Anon http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2989 Anon Mon, 01 Mar 2010 13:16:31 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2989 Hey Greg, I think Soros meant it will be the "ultimate" bubble. Meaning its not a bubble yet, but if fiscal conditions/policies etc dont improve this will be the biggest of all bubbles. Hey Greg, I think Soros meant it will be the “ultimate” bubble. Meaning its not a bubble yet, but if fiscal conditions/policies etc dont improve this will be the biggest of all bubbles.

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2988 Greg Atkinson Mon, 01 Mar 2010 10:25:47 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2988 Well we know what George Soros thinks now and according to Bloomberg he reckons gold is in a bubble. He also seems to reckon he can ride the bubble for a while as he was a gold buyer last year. See: http://www.bloomberg.com/apps/news?pid=20601109&sid=aFszao23VDGA&pos=11 The question is, when will he start selling and what will that do to gold prices? Well we know what George Soros thinks now and according to Bloomberg he reckons gold is in a bubble. He also seems to reckon he can ride the bubble for a while as he was a gold buyer last year. See: http://www.bloomberg.com/apps/news?pid=20601109&sid=aFszao23VDGA&pos=11

The question is, when will he start selling and what will that do to gold prices?

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2306 Greg Atkinson Thu, 05 Nov 2009 20:30:00 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2306 Yes Senator it is all happening. I am still not a gold fan at these prices though and the gold price in AUD terms has not had a great run this year. Just because India is shifting from USD to gold does not make gold a good investment in my mind. But I am probably one of the few gold bears around so I guess not many people share my view. Yes Senator it is all happening. I am still not a gold fan at these prices though and the gold price in AUD terms has not had a great run this year. Just because India is shifting from USD to gold does not make gold a good investment in my mind. But I am probably one of the few gold bears around so I guess not many people share my view.

]]> By: Senator13 http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2302 Senator13 Thu, 05 Nov 2009 09:52:16 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2302 This is an interesting Gold article – seems there is further movement going on: http://www.smh.com.au/business/markets/gold-hits-fresh-record-on-bank-buyup-speculation-20091105-hyh1.html This is an interesting Gold article – seems there is further movement going on:

http://www.smh.com.au/business/markets/gold-hits-fresh-record-on-bank-buyup-speculation-20091105-hyh1.html

]]> By: Greg Atkinson http://www.shareswatch.com.au/blog/commodities/is-the-gold-bubble-about-to-burst/#comment-2228 Greg Atkinson Fri, 30 Oct 2009 01:10:46 +0000 http://www.shareswatch.com.au/blog/?p=1778#comment-2228 Ned thanks for clearing that up! I was scratching my head wondering what Yarrestin meant. I thought if I read the word backwards while hanging upside down drinking a beer the meaning might become obvious..but I only got as far as having the beer :) Ned thanks for clearing that up! I was scratching my head wondering what Yarrestin meant. I thought if I read the word backwards while hanging upside down drinking a beer the meaning might become obvious..but I only got as far as having the beer :)

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