A bubble in gold?

cladking

There's certainly no bubble now but the most astute investor I've ever known
suggested that there's going to be. I've been approaching this conclusion my-
self because of the way the media downplay gold as a financial instrument. Few
investors maintain any gold in their portfolios and inflation is becoming increas-
ingly apparent. Even the FED has suggested that inflation will become a greater
problem as time goes on.

It leaves me wondering what the trillions of investment dollars can do to this me-
tal if it becomes all the rage and popular to own. More frightening perhaps is con-
templating what silver could do if it tags along with gold.

Good arguments can be made that silver will tag along since it shares gold's role
as money to a small extent and that in the kind of quantities most can afford gold
the product is very small. Many people would be far more comfortable with fifty
ounces of silver than an ounce of gold.

Of course there's barely more silver than gold so the price rice in silver could be stag-
gering. Or perhaps silver will be left behind as people turn to the security of gold.

So, are my advisor advisor and I out in left field somewhere or do you think there
could be huge amounts of money thrown at the metals or gold?

BECOKA

When it hits 2K sell, sell, sell.

BECOKA

When it gets back down to 1K, buy, buy, buy.

AUandAG

With the prices as high as they have been there has been renewed activity on a lot of gold properties here
in Nevada. Barrack just announced that their new property can produce a million ounces a year, with more
to be found with proper exploration. So,,,,,can gold have a bubble, sure it can.
Demand drives exploration and production. We have yet to get up to speed here in Nevada with many
low grade reserves still just sitting waiting to be worked. Lots of supply and now demand has caught up.
We'll see what kind of bubble if there is one.
Just an observance,
bob

trozau

If there is a bubble in PMs (gold, platinum, etc.), the spot prices would be multiple times what they are now. The current prices are just partially reflective of the US dollar (and other fiat currency) supply/inflation. As it currently stands, only a very small percentage of investment money is now in PMs. The prices would skyrocket with even just 25% of the investment money should go into PMs (as the supply would not be able to cope with the demand). JMO

roadrunner

Sure, we're in a 6-8 year old "bubble" in PM's with another 3-8 years to go. That's one long bubble though not quite as extended as the credit/equity bubble of 1980-2001.

Huge money will be thrown at PM's, energy, and most commodities. Where else will people go for safety? Housing? Beanie Babies? Tulips? The Dow? Bank stocks? CD's? Hedge funds? It will start to make sense to buy as much stuff as one can to beat the price advances coming on many daily consumer items esp. food.

Exploration on gold? What little is started up in the current anti-mining, pro-environment and highly politically charged world will amount to nothing in the next 5 yrs. We're going to bat with essentially what we have now. It takes 5 or more years to get mines going (3+yrs for re-establishing defunct mines). Figure that most mines don't become productive. Mining infrastructure was ignored in the 1990's and still today as the miners sought to hedge forward production for the quick and easy dollars of the carry trade.
They are paying for that today. Now that labor, electricity and oil costs have skyrocketed, the costs of exploration are only that much higher. Gold has gone from $260 to $950/oz and yet annual production still falls short of demand....and the gap has been increasing.

roadrunner