After Several Years of Popularity, Gold Bugs Back to Being Geeks (GLD) (IAU) (SLV)
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The price of gold declined on Thursday, reversing yesterday's gains which came on the heels of weaker than expected US Q4 GDP. Gold has been in a range bound pattern since the start of the year, with $1700 providing overhead resistance and support bunched around $1650 per ounce.
Silver has been trading with a slightly more bullish tone, though it too appears range bound between $30 and $32 per ounce.
Interestingly, recent bullish trends in equities combined with higher bond yields, have investors in the so-called safe haven asset puzzled over gold's next move. Overall the rotation into equities is seen as a move into risk, generally seen as negative for the precious metals. However, some continue to fear the bond bubble is on the verge of being pricked, which could result in a flight to safety. However, despite the uptick, overall bonds yield remains subdued and theories warning excessive central bank intervention will create a collapse remain just that - theories.
In an interesting exchange earlier this week, economist David Faber, dubbed Dr. Doom, warned CNBC's Maria Bartiromo that she was in great danger because she does not own gold. With her classic gritty yet slightly arrogant style, Bartiromo laughed at the remarks and pointed out her jewelry, which may sum up many investors' opinion of gold bugs, as if to say "really?"
Time may prove the gold bugs correct. However, for now, after a few years of popularity, like geeks in high school, they are slowly being pushed back to the fringes of the investment community.
SPDR Gold Shares ETF (NYSE: GLD) is lower by 0.75 percent on Thursday. iShares Gold Trust ETF (NYSE: IAU) is also trading lower. iShares Silver Trust (NYSE: SLV) is down 1.7 percent.
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Silver has been trading with a slightly more bullish tone, though it too appears range bound between $30 and $32 per ounce.
Interestingly, recent bullish trends in equities combined with higher bond yields, have investors in the so-called safe haven asset puzzled over gold's next move. Overall the rotation into equities is seen as a move into risk, generally seen as negative for the precious metals. However, some continue to fear the bond bubble is on the verge of being pricked, which could result in a flight to safety. However, despite the uptick, overall bonds yield remains subdued and theories warning excessive central bank intervention will create a collapse remain just that - theories.
In an interesting exchange earlier this week, economist David Faber, dubbed Dr. Doom, warned CNBC's Maria Bartiromo that she was in great danger because she does not own gold. With her classic gritty yet slightly arrogant style, Bartiromo laughed at the remarks and pointed out her jewelry, which may sum up many investors' opinion of gold bugs, as if to say "really?"
Time may prove the gold bugs correct. However, for now, after a few years of popularity, like geeks in high school, they are slowly being pushed back to the fringes of the investment community.
SPDR Gold Shares ETF (NYSE: GLD) is lower by 0.75 percent on Thursday. iShares Gold Trust ETF (NYSE: IAU) is also trading lower. iShares Silver Trust (NYSE: SLV) is down 1.7 percent.
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David Faber, Maria BartiromoComments
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Gold As An Investment
Tommy Udo on Jan 31, 2013 05:30 PMMark as Spam | Reply to this comment
Maria B. better keep her gold jewelry in a safe place. One day she may need to sell her gold to buy a loaf of bread.