Gold is the Next Bubble

In the past I have written a bit about – how to invest in gold, but looking at the recent run up in gold prices, it looks like – gold is where the next bubble is going to form.

There is nothing in the world that can rise indefinitely. Everything that goes up must come down. That was what happened with Japanese Real Estate, Dot Com and then the Real Estate bubble.

It is too early to call a gold bubble yet, but the way in which gold has run up means that there is immense risk of a sharp fall. There is no way of telling when this will happen, but it is inevitable.

Gold Bubble

A friend of mine told me that on some days, there is a queue of people lined up outside Mumbai’s prominent gold shops to sell their old jewelery and take advantage of the peaking gold prices. Selling gold jewelery is really unusual for Indians, and I was quite surprised to hear this.


Does this indicate a bubble in gold?

I know that it is still quite early to call a gold bubble because there are a large number of people who still haven’t advised me to buy gold.

And gold is not the topic of conversation during lunches or dinners. When gold becomes the topic of dinner discussions – you can be assured that the bubble is going to bust.  Till then you can watch with wonder at how high this precious metal goes.

Source of Gold Chart:

5 thoughts on “Gold is the Next Bubble”

  1. Manshu,
    You have posted on the topic ‘opinion on gold’, twice (March-09 and on October-10).
    I think its time to review the opinion again. Please review in terms of indian rupee (and not USD) since whenever gold had come down (in USD) it has not down in INR due to Value of the rupee against USD. “Aare bhai, bahar ki duniya me sona gire ya chade… apne yanha to badhta hi hai…to chhote INVESTER ko kya karna chahia ?”

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