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Gold as the “ultimate bubble”
- tocomment 16y agoIs the price anywhere high enough to be a bubble? The current price doesn't seem that unreasonable to me. Am I mistaken?
- badmash69 16y agoIf you look at the historical price of Gold, you would notice that it was relatively flat for most of 80s and 90s. The high in 90s was about $350 per oz. The gold prices began to appreciate remarkably in this decade at it is at a high of $1300 per oz. That is a very sharp increase in a relatively short period of time. That slope is the kind of the "bubble slope" you look out for, Another point is this : gold can not be consumed. You cant eat it, use it to build industrial products. Almost Every oz of gold that was ever mined exists somewhere in the same form. In absence of any specter of shortage of gold, its sharp increase in value doesn't make any sense.
- tzs 16y agoYou can eat gold. Search for "edible gold leaf".
- badmash69 16y ago.... but you can' digest it. If gold eating was popular culturally, there would be people mining for gold in sewers. Gold is also used in products .. and there salvage companies that specialize in processing this gold. My point was that when the demand curve shifts , the supply curve can also shift as mining even "difficult to obtain" gold ( as in above case) becomes profitable and supply curve will also shift. And the price should stabilize -- but it hasn't yet .. because the demand keep growing .
- kaitnieks 16y agoIt does look kind of unstable: http://inflationdata.com/inflation/images/charts/Gold/Gold_inflation_chart.htm http://inflationdata.com/inflation/images/charts/Gold/Gold_i... Despite that I own some gold related stocks and ETFs. I believe there is still way to go, especially considering the uncertainty about the world currencies.
- joeycfan 16y agoNot really - it's based on an intrinsic value.