Gold charts – Valcambi Gold
When experts claim gold to be in record high territories and therefore
being in a bubble, they mostly refer to gold's long term chart (monthly
closes). When looking at this chart one would easily believe that gold
is a bubble indeed therefore an accident waiting to happen. It's recent
high of $1925+ seems to be too far stretched from its long term average
of $448. The problem however with this chart is that it is extremely
distorted. The distortion arises from the fact that this chart doesn't
take into account the loss of purchasing power of the dollar over time.
Needless to say the purchase power of a 2011 dollar doesn't match the
purchase power of a 1980 dollar.
Yes, bull markets do end when approaching bubble territories, but we are
far away from that. During previous 'real' highs more than 20% of all
invested money was in gold and gold shares, today this percentage is
still below 1%.
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