I'm not any kind of expert, but if what palmer says in #97 is true then we're already into a speculative market. If gold can be dug from the ground for less than current market prices, then guaranteed it will come back down someday unless energy prices cause production costs to rise. As far as I know gold doesn't have any kind of cartel controlling it the way that deBeers controls the diamond market, so it will eventually bounce around somewhere a bit above production costs.
I don't know that I agree that gold will continue up very much. Perhaps it will, given all the advertising it's getting, and people are getting out of the real estate market and perhaps will want a place to put their new cash. But I've just seen this speculative gold run-up before, and heard people swear how important it is for years and it just hasn't panned out that way since the early 80's. I'm just not buyin it.
Interesting. Thank you.
It certainly could go up higher... in fact, it could go up LOTS higher. The problem is knowing when to get off the ride. Those who agree with the original post NEVER get off because gold is the ONLY asset they can hold when the world is falling apart (not that it would be the smart thing to do even in that case).
When will the ride be over? I have no idea. It may be today, or it may double in price in six months. But when it hits the wall it will fall apart faster than any of us would be able to yell "SELL!!!". That's how these things work.
Free advice (worth every penny) to anyone who wants to take it. Any time you see someone talk about "bubbles" and they restrict their comments to the current real estate and/or stock markets while ignoring commodity prices... run, do not walk, to the exits. They don't know what they're talking about. The price of gold today has very little to do with any intrinsic value... it's all speculation. There's nothing that says you'll be the last sucker on that pyramid... you might still make a killing. But don't count on it.