What happens if gold bubble bursts

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Learn more and compare subscriptions content expands above. Rate Story. Font Size Abc Small. Abc Medium. Abc Large. Related Jim Rogers has a warning for commodity traders Bubbles developing in stock and bond markets: Jim Rogers Gold, silver may disappoint in short term, but best bets for next 2 years: Jim Rogers.

Bonds are in a bubble everywhere. Many stocks have started to form a bubble. Property in Korea, New Zealand and many places are in a bubble. The big talking point this morning is that some of the US companies are getting a little bit cautious and the US seems to be preparing for the delta variant.

Amazon has already pushed back their work-from-home timeline. But the markets seem to be completely shrugging off any threat from the third wave or the Delta variant? As you know, markets everywhere have been going through the roof. It has been unprecedented because we have had so much money printing by central banks all over the world. I am not good at market timing but I am sure it is going to come to an end some time in the next few months. This has never happened before.

Unlike equities, commodities are getting a little bit more sensitive on the news flow around Covid. We have seen a bit of a knee-jerk reaction in crude overnight. It could have a domino effect on raw material prices, inflation and thereby earnings of corporates?

Well the cheapest asset class in the world at the moment happens to be commodities. Almost forty years after the U. Brian G. Belski said in an interview today, following up on his June 14 report.

Belski predicted. One of the best ideas is to purchase gold, which is a good diversifier. The yellow metal has low or negative correlation with other assets. Therefore, usually gold shines when other asset markets crash. The best example is the Great Recession. After the Lehman bankruptcy, the stock market bubble burst, which pushed the price of gold up. Some people believe that gold was in a speculative bubble in the second half of the s, which burst in How can you say that the price of gold is too high, when you do not have an internal benchmark?

Moreover, it seems that the price of gold rallied because its fundamental drivers changed. In s, the U. In , the stock market collapsed, risk-aversion sky-rocketed, while real interest rates plunged.