Gold Bubble

George Soros Clueless on Gold and "Ultimate Bubble"

George Soros seems to be clueless on gold and his obsession with it being the “ultimate bubble.”Soros doesn’t seem to understand the reason there’s support under gold and why that will continue for a long time.He said to Reuters, “I called gold the ultimate bubble which means it may go higher but it’s certainly not safe and it’s not going to last forever,” although reluctantly admitting it’s the

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Is Deflation Looking to Pop the Gold Bubble?

If Goldman Sachs is publicly bullish on gold, is that a good thing or bad thing for gold bulls? Wall Street’s notorious trading house published a report on gold last week setting a price target of US$1,300 in the next six months. The report cited several factors. But before we get into them, we’ll confess it made us a bit nervous. Whenever any broker is saying one thing, you have to wonder if they’re actually doing the opposite. That said, Goldman did make a point that is true of an asset in a bull market: it requires corrections to shake out the speculators and weak hands from time to time. Following the June high north of $1,250 the net speculative long positions declined. Traders took profits. And so did momentum players in the exchange traded funds market. But then something happened that Michael Pascoe and Rory Robertson did not expect. The gold bubble did not pop. Because it’s not a bubble. The momentum players departed and the price found plenty of support. It’s now around US$1,220. Goldman says the big catalyst for a move higher (other than its announcement leading to a stampede of money into gold short-term) is a repricing of U.S. growth expectations for the rest of this year and all of next. Maybe it’s a fear trade, or just bearishness on U.S. corporate profits when unemployment keeps rising. Either way, about the only dubious chart we saw in the whole report is the one showing lower U.S. real interest rates and the gold price (exhibit five). As those cool cats in statistics say, correlation is not causation. It’s possible low rates give speculators fuel to play in the gold market. But it’s more likely, we reckon, that U.S. rates are low because the bond market is pricing in a deflationary scenario. So why would gold rise in a deflationary scenario? Good question! It brings us full circle to the argument fund manager David Einhorn made when we announced his gold position: you buy gold when you think monetary and fiscal policy are bad (we’re paraphrasing). Whether it’s inflation or deflation matters less than something unconventional and bad is going down. Gold does well in that environment, what with it being real money and all. Whether you like it or not, more and more governments across the world are spending out of an empty pocket. They’re spending to give money to people who have lost jobs as a result of the structural shift in the labour markets. That shift came from globalisation. The money might keep people above water for …

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Is Gold Getting Too Popular?

Some gold investors are getting a little jittery, as the growing popularity of gold, especially as it becomes increasingly reported on by the mainstream press, has them wondering if we’re approaching gold bubble status.Taking the housing market and Tech stocks of the last ten years or so as examples of bubble markets bursting, we’re far from that happening with gold, for several reason.First is

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Gold Prices Down Today as Longs Run for the Exit

Gold prices are falling today as some gold investors take profits and others with long positions get out of the market on fears the general public is entering into the fray, which could create a gold bubble which will burst. I’m not sure that the person on the street has become engaged in the market yet, as they hadn’t as of just recently, but it is a real concern to take into consideration when

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George Soros’ SPDR Gold (NYSE:GLD) Stake Lowered

Earlier in the year George Soros had mentioned gold was a bubble ready to burst, although he failed to include the idea that he had made a huge investment in gold interests, including SPDR Gold Trust (NYSE:GLD).In a recent required 13F filing, Soros revealed that his Soros Fund Management had cut back on his position in SPDR Gold by 9.6 percent, probably from concerns over the high rise in price

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George Soros and Secret Gold Bull Market Goes On

Secret Gold Bull MarketOne of the reasons the assertion that gold is an ultimate bubble by George Soros makes little sense, is he possibly doesn’t understand what’s really going on in the markets, or he’s being the sly fox he is as far as investing goes.For example, Soros was saying this on one side of his mouth while investing millions in gold mining companies and gold ETFs. So I think Soros was

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