Gold prices continue to rise as investors turn to the metal for protection from plunging equity prices and fluctuating exchange rates. With so many sovereign nations facing sharply increased debts, there is a rising fear that governments will simply “print” money in order to pay these debts. This would result in inflation that would erode the actual buying power of the currency.
“Gold is strong in any and all currency terms, and it is now entering that stage when prices go parabolic,” Gartman said today in his Suffolk, Virginia-based Gartman Letter. “This will end when it ends; there is really nothing more that can or shall or should be said.”
A report from Well Fargo & Co. suggests that gold is forming a “bubble that is poised to burst”. Despite this dire prediction, there is a growing acceptance that gold is destined to hit the $2,000 an ounce mark in the near term.
Source: Bloomberg