{"id":829,"date":"2011-04-15T00:05:26","date_gmt":"2011-04-15T00:05:26","guid":{"rendered":"http:\/\/www.itmtrading.com\/blog\/?p=829"},"modified":"2014-11-17T08:06:14","modified_gmt":"2014-11-17T15:06:14","slug":"is-gold-in-a-bubble","status":"publish","type":"post","link":"https:\/\/www.itmtrading.com\/blog\/is-gold-in-a-bubble\/","title":{"rendered":"Is Gold in a Bubble?"},"content":{"rendered":"

As gold continues its rise during this bull market<\/a> investors get concerned about the possibility of being in a bubble, and rightfully so.\u00c2\u00a0 Many people lost considerable amounts of money during the dot.com and real estate bubbles in the last 11 years.\u00c2\u00a0 Not to mention the \u00e2\u20ac\u0153talking heads\u00e2\u20ac\u009d of financial and news networks<\/a> love to speculate on gold being in a bubble.<\/p>\n

The funny thing is many analysts have been saying we have been in a bubble for years, but that is obviously not come to fruition, it is mere speculation.\u00c2\u00a0 It is difficult for anyone to call the top of any market when in the middle of it.<\/p>\n

In order to determine for yourself if we are experiencing a bubble in gold you must first understand how bull markets work.\u00c2\u00a0 Typically bull markets will have three phases (click on three phases<\/a> to learn about them in detail).\u00c2\u00a0 We are currently by expert accounts in the second phase.\u00c2\u00a0 The third and final phase is when panic buying begins, creates a blow off top or \u00e2\u20ac\u0153bubble\u00e2\u20ac\u009d and then a correction to fundamental values.<\/p>\n

The chart below depicts previous bull markets in gold and the NASDAQ, and compares that performance to the current bull market.<\/p>\n

\"\"<\/a><\/p>\n

In the chart above it becomes glaringly obvious that no \u00e2\u20ac\u0153top\u00e2\u20ac\u009d has formed as of yet, though it does seem that we should be getting close to hitting that third and final phase.\u00c2\u00a0 So it boggles my mind when people and so called experts say that we are experiencing a bubble when all you need to do is look at data and history to see that gold\u00e2\u20ac\u2122s rise has been mediocre at best.<\/p>\n

I believe that we will see much higher values from here, in fact just to equal the percentage gain from the last bull market in gold (roughly 2,400%), gold would need to rise to just over $6,000 per ounce (from $252 per ounce).\u00c2\u00a0 When it gets there I think we can begin to speculate that a top may be forming, but even then other variables will come into play.\u00c2\u00a0 If the dollar continues to lose value at a more rapid pace, it is possible that we could see much higher values in gold than $6,000 per ounce.\u00c2\u00a0 Time will only tell, enjoy the ride.<\/p>\n","protected":false},"excerpt":{"rendered":"

As gold continues its rise during this bull market investors get concerned about the possibility of being in a bubble, and […]<\/p>\n","protected":false},"author":6,"featured_media":830,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1207],"tags":[33,73,97],"class_list":["post-829","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-bull-market","tag-gold-values","tag-performance"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/829","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/comments?post=829"}],"version-history":[{"count":1,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/829\/revisions"}],"predecessor-version":[{"id":11004,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/829\/revisions\/11004"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media\/830"}],"wp:attachment":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media?parent=829"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/categories?post=829"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/tags?post=829"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}