All that glitters is not gold ?
Gold bugs must love this. gold price is fast approaching US$ 1200/ounce. But is it justified? Jim rogers has just set up a gold fund, John Paulson, David Einhorn have also joined in the hunt. Don’t tell me that they are wrong?
I am a gold skeptic like Buffett.There’s no dividend yield. Presently, it is supported by investment demand. Yes, supply is limited but this investment demand can disappear as fast as it comes.
What if carry trade using dollars ends when FED raises rates high enough? Surely, the gold price will tumble badly. of course, gold price could still go higher as long as Bernanke & co. keeps printing the money. But, will he be want to known as another Greenspan?
Gold jewellers must be worried now. Not just because their business are affected but they have to put in extra effort to prevent robbers stealing their bounty.
I will not be surprised if gold is the colour of 2010.
Entry filed under: Watch your step.