Yes, we’re calling the current market for gold bullion a bubble. Prices were pretty reasonable for a while, as industrial and jewelry demand gradually increased. Mutterings about hyperinflation put a little more energy into the market. (Hint: petroleum prices continue to decline. No matter what you may think or hear, this is not hyperinflation.)
Now, the gold price curve is no longer curving, it seems to be going straight up – always a sign of a bubble.
Other signs? Story this morning on ABC about people selling their jewelry and getting paid amounts that totally surprise them. Great visuals! Once commodity coverage escapes the financial press, you can just about count on either a bubble or a crash happening or about to happen.
BTW, IFO has not bought gold. She did sell a gold necklace a couple of years ago when the price was ‘only’ about $900+. Advice for those readers who may be tempted to do the same thing. Shop around. IFO did that and got a significantly higher price for her necklace than the first quote.
On another occasion, Hydrangea, a friend of hers, did the same thing – got a quote on some silver coins she found in the back of a little-used drawer. She called coin shops around her area and asked what they were paying. So Hydrandgea found a good quote about 40 miles away, but went to her regular dealer, told him about it and he raised his quote.
So, happy market watching!