Gold's no bubble - here are some real bubbles

May 27, 2010, 12:00

Merryn Somerset Webb

Posted byMerryn Somerset Webb

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Earlier, I explained why we don't think the gold price has yet moved into bubble territory. You can read all about it here: Why gold is not in a bubble. But anyone who still isn't convinced might like to look at the graphic below. It puts the gold price into context next to real bubbles. The implication? There is a long way to go before gold hits the kind of levels that should make you want to sell.

Chart courtesy of  Business Insider

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  • 1. Nick

    (28 May 2010, 02:53PM)  Complain about this comment

    The difference between gold and the other assets mentioned is that these other assets have only seen one bubble in living memory, gold is having its second. In the early 70s gold went from $50 to $900. No reason to think that "second time around" 500%+ rises are achievable.

    Alternatively if you going to use a twenty year bull market for the S&P 500 why not use a thirty year bull market for gold in which case it has risen 2300%. Easily the biggest asset bubble ever.

  • 2. Flier

    (30 May 2010, 11:24PM)  Complain about this comment

    Nick, obviously no student of history!!!

  • 3. ktheking

    (07 June 2010, 06:59AM)  Complain about this comment

    @Nick : ....No reason to think that "second time around" 500%+ rises are achievable.... => indeed it will be more. If tomorrow for one or the other reason (say massive spanish bank failing ,together wit some war threats from one or the other arabic country) markets plummit deeply ,what would be next item in which you put your own cash ?

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