Gold Investment: What do experts say about the gold bubble?

Gold Investment - 22 June 2011

Some people are of the opinion that gold is in a bubble. However, experts in the gold trading market do not share this sentiment. It is not guaranteed that prices are going to escalate as they have done in the past, it is however anticipated that the value of gold will continue to rise.

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Invest in precious metals today! Contact us for details.

One of the myths that are associated with gold is that it is a crowded trade; this is in fact untrue as investment in gold continues to remain low. More than two decades ago, private bankers would hold about 3 percent of their wealth in gold whereas today it is only about 0.5 percent. Last year at the LBMA conference in Berlin, it was reported that investors were holding anything from 0 percent to 10 percent of their wealth in gold, silver and other precious metals. This means that it is a very long way away before any type of saturation takes place.

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Invest in precious metals today! Contact us for details.

Another myth is that gold has raced to the $1500 barrier without being corrected. Taking the bubbles into account, gold is not accelerating in value steep enough to warrant this type of claim. The price of gold has increased in dollar terms at 70 percent over the last 36 months while stocks increased at 160 percent during the 1920's. In 1997 the German Neur Market increased by 1600 percent. In 1720 the South Sea Bubble increased by 9 fold in a short 5 months. Gold is considered to be remarkable because of its longevity not so much the speed of the bull market. Ever since 2001 gold has delivered inflation beating returns, especially in the U.S. and Britain.

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