$1776 was today's high.
Quote:
Originally Posted by epitome
But it is a bubble ... growing out of fear.
No different than oil and god knows how many times oil prices have deflated.
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It is very different than oil. Throughout history people have turned to gold during financial instability, and will continue to do so all around the world. This is not just happening in the USA, it's global, and countries are every buying gold by the tonne. Because if the USD is replaced as the world reserve currency or just collapses, those who are holding it lose big. That's why many countries are buying gold with their dollars right now, bubble or not. When/if the merry-go-round stops, you can either be holding worthless paper or something that actually has value.
And I wouldn't call it fear, I'd call it common sense. There is no reason to be holding dollars (or a few other currencies) at this point when you can ditch the devaluing IOUs for something tangible.
Two things will cause gold to drop.
1) The end of the global financial crisis.
2) A huge gold deposit is found.
Both will eventually will happen. But until they do, gold is going up. The end of the financial crisis is a long while away and there is a good chance the worst is yet to come.
Worst case, gold drops and you sit on it until it eventually rises again, because history always repeats itself.