There is No Gold Bubble
The production of gold in the world is substantially less (about 1500 tons per year) than the amount being bought. It has been that way for years. Where is all that extra gold coming from?
There is a huge short position in gold that was slowly put on over years and years to artificially depress the price of gold, to artificially depress interest rates in the US, to artificially keep the US economy going long after it should with out a healthy correction of all the excesses built up in the economy (read massive amounts of debt).
What is currently a big driver of higher gold prices is the gold shorts trying to get out of their short positions. This is going to take years as total short positions are about 10,000 tons worth.
There is no bubble in the gold and silver markets because there is no excess speculation going on in the gold and silver markets. Gold and silver market bubbles are years away from now. Sentiment indicators are very bearish (which is very bullish in reality) for gold, silver and the shares. Most people in the English speaking world can not understand why anybody would want gold and silver because they can not understand what anybody would do with the stuff. That is like sayiing why would anybody want real money (which gold and silver are) because they can not understand what anybody would do with real money. Most people in the English speaking world have been brain washed over a number of generations now into valuing digital token bits on some company's or government's hard drive (which they have little control over) over real gold and silver. Most US dollars, Euros, mutual fund shares, stock shares, bonds are nothing but digital bits on a hard drive in some computer somewhere. The entities that actually own, have real control over, the hard drives actually own all those digital US dollars, Euros, mutual fund shares, pension funds, stock shares, and bonds. Most in the English speaking world have been conned into giving up real ownership of the value they produce every week, conned into putting it into the control (real ownership) of other entities for safe keeping. Conned into believing that they do not have to think or worry about or work at their future retirement and healthcare funds. That those are all being taken care of by entities that they can trust. Well, who takes better care of property? The owner or a non-owner? There are hundreds of millions of people that are in for a rude awakening when they realize they have had massive amounts of value stolen from them. Gold and silver, that you actually own because you actually control it, are the ultimate safe store of value.
Yes, it is a radical idea for most English speaking people to actually go out and buy the actual metal. They are quite uncomfortable with this idea. Which is another reason why there is no bubble in the gold and silver markets. And, there is only a tiny minority of people in the English speaking world that actually take responsibility for themselves and the safe keeping of their own wealth, that are storing a large percentage of their wealth in gold and silver right now. Which means there is no bubble in the gold and silver markets.
There should have been mass liquidation of long gold positions on Tuesday. The open interest only went down a measley 1505 contracts to 342,608. There was no "massive liquidation" as the financial media would have you believe. There is no bubble because there are hardly any new specs to liquidate. What is normal in the past is to see OI rise 100,000 contracts on a $30-$50 up move. This type of thing is not happening any more. This reaction was just another huge short selling wave by the dumb or the market manipulators, riggers, managers.
From the BIS (Bank for International Settlement):
"And last, the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful."
There is no bubble. Gold and silver are about to take off to higher levels **days** from now. This reaction is going to be short, and sweat to those smart enough to be buying weakness.
Are they stupid or are they doing this on purpose:
"The seven large TOCOM gold shorts increased their net short position by a quite substantial 11,563 contracts on May 15 to a total of 201,365 contracts or 6,474,025 troy ounces. Goldman Sachs was the ring leader with an increase of 3,774 contracts to a total of 45,285 contracts or 1,455,944 troy ounces." - www.lemetropolecafe.com
Right now oil is about USD 70, up about 75% from 1980 highs of USD 40.
Gold should be up 75% from its 1980 highs, also, or around USD 1,500.
No way is there any bubble top in the gold and silver markets. Gold and silver have a long long way to go on the upside. And, it's going to take years.
If the gold and silver markets are confusing you, buy the Gold Rush 21 Conference DVD set. Then, what is going on in the markets will make sense to you.