Gold: How High is Up?

Monday, December 26, 2011 – by Staff Report, Daily Bell

Will gold deliver another glittering year in 2012? ... This year saw dizzying gains and two big crashes. So does gold still deserve its 'safe haven' image, or is it just another volatile and risky asset? Is it a wise decision to buy gold at present? The asset – famously given as one of the gifts of the magi – is seen as the ultimate "safe haven" investment in times of political instability, economic turmoil or rising inflation. Given world events this year – the Arab Spring, financial crisis in the eurozone, economic stagnation in the West, and the inflationary effects of central banks printing money to keep credit markets liquid – it is not surprising that the price of gold has risen again, after a decade of strong gains. – UK Telegraph
Dominant Social Theme: Gold is in a bubble. Beware.
Free-Market Analysis: Every once in a while, and with increasing frequency, major media presents a commentary wondering "how high gold can go" and whether the yellow metal is now in an official bubble. Every once in a while, we point out that gold is being driven by market manipulations, not by the free-market.
Gold can keep going up until this metals-market "bull" subsides. When will it subside? We are on record in plenty of articles as stating (for years now) that the metals bull will gradually peter out around 2015 or so. We came to this conclusion by comparing this bull leg to the previous one in the 1970s. We figured the economy was 50 percent more distorted now than then. And that's why we tacked on an extra five years. "Why Gold Sells Off and What Will Happen Next ..."
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