Thoughts on Gold

Alan Demby from Business Day writes regarding gold:

Few investment-savvy individuals are unaware that gold is a hedge against uncertainty. Indeed, uncertainty, while anathema to investors in equities, is manna from heaven to investors in bullion.

Uncertainty comes in several guises, among them inflation, conflict, political chaos and currency instability. Inconceivable as it might appear to those who weren’t there to experience it first-hand, inflation — and a lot of it — was the prime reason for the 1980 gold spike.

I guess he pretty much covered it. Take a not-yet volatile market, awash with liquidity, then mix in rampant speculation and risk taking. Beat the market till frothy. Add in a possible short squeeze with some geopolitical tension and you’ve got yourself a bull market.

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