11/27/09 Baltimore, Maryland – Gold is on track for its best monthly performance in a decade. The money metal reached $1,180 earlier this week, another all-time high. There’s buzz that India, which bought 200 metric tons of gold from the International Monetary Fund earlier this month, might well buy the rest of the 203.3 metric tons the IMF has put up for sale.
A gold run-up like this perks up the ears of the mainstream…and that often gets our contrarian impulses tingling. MarketWatch took note this week of the interest in gold among big-name hedge fund managers. Good for them. MarketWatch is only 10 months behind us in noting David Einhorn’s interest, and seven months late catching onto John Paulson’s stake in South African miners and the gold ETF.
All of this is fueling talk of a “bubble” in gold. To our friend James Turk, this signals that gold has begun only stage two of a three-stage bull market. “Don’t be misled by what you may hear or read in the mainstream media, and even much of the alternative media,” he writes. “After all, how many commentators have correctly identified gold’s bull market, now a decade old?” Or for that matter, how many correctly identified the tech bubble in the ’90s or the housing bubble this decade?
“Gold has moved from apathy and neglect – stage-one characteristics – to growing attention. But importantly, instead of embracing gold and analyzing it to determine relative value, today’s attention is one of widespread disbelief and skepticism that gold can climb higher. These are exactly the responses one should expect to emanate from stage two.”
“As gold climbs higher, we will eventually enter stage three. The timing of its arrival cannot be predicted, but we will know it has arrived when commentators who have been consistently wrong about gold will be telling everyone willing to listen to buy gold.”
Addison Wiggin
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He’s the creator and editorial director of Agora Financial’s daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
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nice post. thanks.