Will We See a Gold Bubble?
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One of the ways that a bubble forms is when herd mentality takes over and investors pile haphazardly into the investment that is doing well at the moment. Some fear that this is what could be happening right now with gold. Gold continues to surge ever higher, touching new highs almost daily. Today, gold topped $1,217 before settling back around $1,213. As gold continues to gain momentum, it is little surprise that many investors are starting to worry that things are starting to look might like a gold bubble. (There are those who think that, rather than going for gold, now is a good time to go for silver.)
But is a gold asset bubble forming? That is the question. China just warned that it is very possible that we could be seeing a gold bubble. Chinese motives are a little suspect, since there are rumors that China wants to buy more gold, and that its talk of concern about a gold bubble is merely intended to slow the rise of gold until China can buy more. But even if China does have ulterior motives in its warning, the point is still a valid one. With gold rising so dramatically, and with investors of all stripes rushing to get in on the gold rush, speculation is likely to run rampant.
It is time to take a step back and consider your investing options. It is also worth considering whether or not you think that gold can rise higher. It’s pretty high right now. Some of the more optimistic are predicting $2,000 an ounce gold by sometime next year. If you believe this scenario is feasible, then you might want to buy. But if you think that gold is already nearing its top, perhaps it is time to look elsewhere.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
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