I am not an economist nor a stock broker. But, just using my common sense, i belive Gold is whats gonna be our next bubble. The rate its rising everday is sure making its decline inevitable.
Now more people are buying GOLD ( thanks to NAS) but i can clearly see its fall once everyone starts doing so. Tulip was more expensive than GOLD back a century ago and the day it started falling, millions lost their hard earned savings, so beware! Dont fall for gold.

 GOLD definitely is the new bubble but it is unlikely to burst in the next couple of years, especially with the recent financial slump.

 @sajhababa- how ?

DONT buy Gold (a very private opinion about current hipes and hysterics….)
Do you remember the story about the Hunt Brothers in the late 70s early 80s?

Nelson Bunker and his younger brother Herbert collected a lot of silver and made the silver price jump up. In parallel the price for gold reached 900 $. When they got bankrupt due to speculations on silver futures, the price for gold collapsed to some 400 $.

What did we learn from that? I think ... NOTHING.

What is the real value for gold?

It has very low consumption in industry. Majority is collected or converted to jewellery. So we have to assume that the 145 000 tons we digged out since human beings go for that metal, are still there. Some say only 45 000 tons are still available and gold mining companies tell us it becomes harder and more expensive to produce that shiny metal.

All that might convince you: Gold is a very stable valuable material...but isn´t it?

Truth is: Gold is only rare on the surface of the earth. The iron core of the earth contains a lot of gold. But you don’t have to go so far. There is about ten times more gold in the oceans compared to what we have collected sofar. Bio Mining and gaining metals from hydro thermal sources are technologies for the future. And it is very likely that they will be realised since they are also attractive for standard industrial metals like iron, manganese, zinc and copper. An increasing price for gold will be a nice motivation for new technologies to get there.

What happens to the market price for valuable goods when the available volumes increase can be learned from the history of pearls. When Kokichi Mikimoto invented the culture pearls the price for natural pearls just crashed.

Now imagine what will happen to your gold portfolio when the volume of manufactured gold will double or triple because of the new digging technologies... You better think twice before you buy gold.

Even though there are lots of prophets telling me and the majority of investors to bet on that metal, I will not spend a single $ or € on gold.


How about other material assets … It is very much the same. If they are really rare and no longer manufactured or no longer can be manufactured, you might be lucky and win. The owner of a Galle Vase can be pretty convident. But how many cases are like that and do keep value over time?

Don’t expect a big profit, but only buy what you love and where you have expertise. I bought a used Porsche 911 when the oil crisis in the 70s was popping up. I sold it 20 years later for 2 and half times more.


The real and solid growth comes from industries, so investments in stocks is still the one where you can expect a robust profit. At the moment there are lots of worries again. But we have to face the fact that investments in stocks are driven b`y emotions. And you may take advantage from that… There are many theories about the waves in stock market and how to make profit with alogorithms that promise to predict the future. Actually the most important impact comes from the emotions that traders have. You think that is weird? You are convident that the majority of trades are done by computer programs and they can’t be emotional? Well how about the programmers and their models?

Like many others I am investing in stocks for more then 30 years now. At some point in time I thought about my history and why and when did I succeed.. My conclusions were simple: I managed to skip 3 crashes in stock market, but I got also hurt by one (the one caused by sept 11). So I made profit mainly by reading the investor’s emotions. If I can do this with big events how to make is happen on a daily base?

Story is very much the same like the one with the gold. If you follow the mass you likely will loose… I don’t care about the standard talk about stocks. Same is true for the algorithms that are used by traders. Moving average, elliot waves, dynamic momentum and the like do not really work. Actually you cant be successful since the majority of traders are using those. But if you use these algos to verify what traders expectations are and what their next moves might be… isn’t that smarter?

Anticipating that traders and investors are acting emotionally is the base for success … for the happy few that will get it.

To make the long story short, here are my suggestions:

1. DON’T BUY GOLD nor any other nobel metal that doesn’t have a reasonable consumption in industries
2. Buy matrial assets where you have EXPERTISE and that you really LIKE, but don’t expect a big profit from those. There might be only a few winners.
3. Invest cash where there is really growth = stocks. Aniticipate the majorities of investors and traders are acting emotional. Take your conclusions from that.

If you are inrested in details just drop me a line or send a PN. I will answer your PN, promise.
This post was modified on 19 Aug 2011 at 05:03 pm.

http://www.xing.com/net/business_ksa/non-business-issues-116649/dont-buy-gold-a-very-private-opinion-about-current-hipes-and-hysterics-37847559/

I beg to differ. 

At least in near term, meaning <1yr, I think Gold is a fantastic investment.  There simply are not any other factors that seem to point to otherwise.  Currency market is weak and looks like it will stay weak for foreseeable future.  Central banks all over the world have only monetary tool at the moment, i.e. print more money, which will continue the currency devaluation.  So, Gold is the solid rock to hold on to.

Stock market is in rollercoaster.  World economy is in turmoil.  Investors are flocking to safety, and that is Gold.

Gold is trading at close to $1900 per ounce.  Analysts expect it to reach $2500 by next year or sooner, and stay in $2000's for a while.  

I would hold 20% of my portfolio on Gold.  Makes sense (at least to me).

ps: Interesting tidbit: Kathmandu-ma 10 barsha aghi tola ko Rs.10,000 thiyo.  Ahiley soon tola ko $50,000 pugi sakyo re.

doesn't look like a much of bubble on inflation adjusted basis.

विष्णु पोखरेल, काठमाडौं, भदौ ७- दिनकै हजार रुपैयाँका दरले भाउ बढ्न थालेपछि सुनमा लगानी गर्नेहरू बढेका बढ्यै छन्। कतै तपाईं पनि बैंकमा जम्मा गरेको पैसा झिकेर सुन किन्ने विचार त गर्दै हुनुहुन्न?
बजार विश्लेषकहरू भन्छन्- यो 'अल्पकालीन' लगानी गरेर बढी नाफा कमाउने समय हो, 'दीर्घकालीन लगानी' भने जोखिमपूर्ण छ।

मंगलबार स्थानीय बजारमा सुन प्रतितोला ५३ हजार ९ सय रुपैयाँमा कारोबार भयो। यो एकै दिन ५ सय रुपैयाँ बढेको थियो। पछिल्ला केही सातादेखि प्रत्येक दिन ५ सयदेखि हजार रुपैयाँका दरले भाउ बढ्दै आएको छ। यही वृद्धि दरले धेरैलाई सुनतिर आकर्षित गरेको हो।

विश्लेषकहरूको भनाइमा सुनको मूल्य यस्तो विन्दुमा छ, जहाँबाट अझै धेरै माथि उक्लिन पनि सक्छ, एकैचोटि गर्ल्यामगुर्लुम झर्न पनि सक्छ। दुवै सम्भावना उत्तिकै बलियो छ। तर, तल झर्‍यो भने फेरि यही विन्दुमा आउन निकै समय लाग्छ।
अर्थशास्त्री चिरञ्जिवी नेपालका अनुसार 'आजै किनेर केही दिनमै बेच्ने'गरी अल्पकालीन लगानी गर्ने हो भने यो उपयुक्त समय हो। तर, लामो समय जोगाएर राख्न खोज्छु भन्नेले निकै जोखिम मोल्नुपर्ने उनले बताए। 'तोलामा हजार/दुई हजार नाफा खाएर आजको भोलि नै बेच्छु भन्नेलाई यो बजार ठिक छ,' नेपालले भने, 'दीर्घकालीन लगानीमा ठूलो जोखिम छ। बालुवामा पानी हालेजस्तो हुनसक्छ।'

सुन बजारको अन्तर्राष्ट्रिय इतिहास हेर्दा पनि एकचोटि भाउ तल झरेपछि फेरि माथि चढ्न वर्षौं लागेको देखिन्छ।

सन् १९८० मा अन्तर्राष्ट्रिय बजारमा सुनको मूल्य अहिलेजस्तै अस्वाभाविक रूपमा बढेको थियो। त्यसबेला प्रतिऔंस ८ सय ५० अमेरिकी डलर पुगेको थियो। मौकाको फाइदा उठाउन धेरै लगानीकर्ता सुनमा झुम्मिएका थिए।

तर, ती लगानीकर्ताले कमाउनुको सट्टा केही महिनामै लाखौं डलर गुमाए। सुनको मूल्यले आफ्नो चमक गुमाउँदै २ सय ५० डलरसम्म झर्‍यो। 'घटेको भाउ उक्सिन लगानीकर्ताले झन्डै २५ वर्ष कुर्नुपर्‍यो,' सुन बजार विश्लेषण गर्ने गोल्ड रिपोर्ट डटकमले लेखेको छ, '२००५/०६ मा आएर मात्र बजार फेरि १९८० कै विन्दुमा पुगेको थियो। त्यसबेलासम्म लाखौं लगानीकर्ताले सम्पत्ति गुमाइसकेका थिए।'

त्यसयता विश्व आर्थिक मन्दीले सुनमा चरम मूल्य वृद्धि भइरहेको छ। विश्लेषकहरूले यसपालि पनि मूल्य वृद्धि टिकाउ नहुने बताइरहेका छन्। केही सातायताको वृद्धिलाई धेरैले 'अप्राकृतिक मूल्य वृद्धि' को संज्ञा दिएका छन्।

'सुन बजारको इतिहासले एकदमै धेरै बढेर एकदमै धेरै घटेको देखाएको छ,' नेपालले भने। युरोप-अमेरिकाको अर्थतन्त्रमा अलिकति सुधार आउनेबित्तिकै ह्वात्तै भाउ घट्नसक्ने उनले बताए।

अर्थशास्त्री तथा योजना आयोगका पूर्वसदस्य पुष्पराज राजकर्णिकार पनि लगातार भाउ बढेका बेला चाँडै नाफा देखेर लगानी बढ्नु स्वाभाविक भए पनि स्वदेशी बजारमात्र हेरेर गरिने लगानी जोखिमपूर्ण हुने बताउँछन्।

'अमेरिकी राष्ट्रपति बाराक ओबामाको एउटा बोलीको भरमा सुनको भाउ बढेको छ, कुनै दिन फेरि अर्को बोलीको भरमा ह्वात्तै घट्नसक्छ,' उनले भने, 'सुनमा लगानी गर्ने हो भने नाफाको निम्ति मात्र होइन, जोखिम मोल्न पनि तयार हुनुपर्छ।'

नेपाल सुनचाँदी व्यवसायी संघका अध्यक्ष तेजरत्न शाक्यले सुनमा लगानी गर्ने उपयुक्त समय नभएको बताए। 'भाउ एकदमै अस्थिर छ,' उनले भने, 'यस्तो बेला लगानी गर्नु भनेको डुब्नुमात्र हो।'

Nagariknews.com

Finally shorted gold at $1895 with double inverse ETF couple of days ago. I think it is going to work fine for at least some days. If not outright bubble burst, it is at least due for a correction. BTW, gold is surely in a bubble. When it is going to burst is anyone's guess.

What goes up must come down. NasBro, my recommendation is cut down your gold holdings significantly and take the proft...

I dont know dude, but look at the Gold Price today

Gold 1,787.10 -3.99% fall

|||_||| finally got his redemption on shorting gold ...but this might just be a healthy correction because of markets rallying in expectations/speculations of Bernanke announcing a QE3 on friday
1730s key area to watch on the spot price if it holds there ...it might just go up again
DZZ for those against gold or shorting gold, good one to go long on right now imo ...had it up on my blog yesterday

NasBro: Can I recommend you read the following when you get some time to spare from your Gold research:

http://www.amazon.com/Fooled-Randomness-Hidden-Chance-Markets/dp/1587990717/ref=sr_1_1?ie=UTF8&qid=1314205230&sr=8-1

Nas, I know this is a personal question but I woud really like to know what you work as. You seem to know an awful lot on these stuffs. Oh btw, is it better to hold gold in paper or in the element form?

asti jhandi 1900 pugera aba 1700 ma jhari sakecha...

Austrian school of economics AKA anarchist. Lol

I believe it is just a correction and not a bubble burst.

Here's my action plan, for what it's worth:

I will be paying really close attention when Gold reaches the range between 1700 to 1720.  If it seems to linger there a bit and start to bounce back up, I will buy more Gold.  If it drops further down, I would not touch it.  I will be looking for support again at around high 1500's to buy Gold.   If it falls even further, all bets are off.

Just my dui tola.  Make your own decision.

Current Update:

Gold 1,758.10 -5.54%

Baby Boy Nas: I try not to subscribe to one school of thought. History of Economics and in general has taught us that not all major events can be understood or explained with one line of thought. I believe in keeping an open mind to knowledge and thought. Nevertheless, I wish you luck with Gold, but I still seriously urge you to give a due consideration to your pretty risky asset allocation...

Ha ha NasBro: That's the intent..

http://nagariknews.com/news-highlights/139-highlights/30405-2011-08-24-04-30-08.html