Barrick (NYSE:ABX) CEO Says No Gold Bubble Now

Barrick (NYSE:ABX) CEO was calming fears recently as gold has been going through a minor correction, which seems to always generate fears gold has entered a bubble phase, something Regent refutes.

He said at a recent conference that there is still a lot of room for gold prices to move up.

Being the largest producer of gold in the world is reason enough for Regent to say what he's saying, but it's not just marketing hype, he's correct.

He gave several elements that he would expect to happen if gold was in a bubble, probably the most important one what he identified as being "overowned."

Regent said, “A bubble is when an asset is overowned. And I don’t think you can suggest that gold is overowned.”

“If you take the value of the gold exchange-traded funds (ETFs) as a percentage of US money markets, the gold ETF [holding] is probably about one per cent.”

Another important gold bubble factor to look for in Regent's estimation is the volatility of the metal, which at this time he asserts isn't very much.

“When you look at bubbles, what is a bubble often characterised by? Well, it’s characterised by assets that have extreme volatility,” he added. “The volatility in gold right now is very modest."

Regent also cited comments made by World Bank president Robert Zoellick concerning the role of gold in relationship to global currencies, calling gold a reference point for paper money, or digits, if you prefer.

Fiat currencies are one of the major factors in the rise of the price of gold, although there are several other connected to the price movement as well.

Other macro concerns include the EU sovereign debt crisis, so-called quantitative easing, fate of the U.S. dollar, the economy, interest rates, the balance of trade, among others.

All of these contribute to the overall support under gold prices, and as you can see from all of them, they're not going to go away any time soon.

So with these fundamentals in place, a bubble isn't going to happen, no matter how far the price of gold goes; at least for a couple of years, and maybe longer.

The most obvious identifier will probably be when the man on the street starts to plow money into gold at extremely high prices, but not understanding why he's doing it. Then it may be time to run, but that's not in the cards in the near future.

Barrick says they're on target to produce from a range of 7.6 million to 7.85 million ounces of gold over the next year. In about five years expectations are production will reach about 9 million ounces annually by the mining giant.

Barrick Gold closed Friday at $53.30, down $0.08,or 0.15 percent.

Gold Prices Bursting or Correcting?

The usual speculation when any asset class makes a wide swing is part of gold now, as gold prices are in the midst of a huge downward move, and has generated questions on whether or not gold is correcting or it's in the middle of a bubble bursting.

Anyone familiar with gold for a long period of time knows this is nothing more than a correction, as the elements surrounding a bubble haven't yet emerged, and gold prices have a long way to go before they run their course, although it is a good lesson in what factors will eventually bring gold prices back to earth.

One of the major things ultimately stopping the rise of gold prices will be measures put in place to combat inflation: increasing interest rates.

That alone won't completely stop it if other major factors are driving gold prices up, but it would definitely slow it down, and if implemented in most, if not all, major economies, could have a dramatic effect.

That isn't going to happen any time soon though, as the U.S. isn't even close to thinking of raising interest rates in the current economic climate.

Even if China is to increase interest rates like South Korea did on Monday, that won't be enough to pull down gold in the long term, even though it would push gold prices down immediately and give the appearance of a bubble bursting.

Another thing driving gold prices down down, in conjunction with interest rate concerns, is the temporary strengthening of the U.S. dollar. That's all related to the weakened euro because of the renewed focus on the European sovereign debt crisis, which continues to stubbornly hang on.

After the EU bluffs its way through that or throws a bailout bone to Ireland, that will be considered taken care of, even though as Greece had shown yesterday, as it appears there is still corruption in the process, as Greece said they had underestimated the size of their deficit.

Greece isn't exactly so big that working out how big of a deficit they have should be that difficult. They're obviously understating things in hopes of stealing more money from the region to support their socialist practices via unsustainable entitlement programs.

In the end, there hasn't been much that has changed to justify the typical ignorant conclusions, and wishful thinking by some, that gold has ended its historical run. It isn't even close to being the case.

The U.S. dollar will continue its collapse in light of the inflationary policies of the Federal Reserve, the euro isn't considered that important any longer by the international community, physical demand for gold continues to rise, and of course, it's still the best place for safety in the turbulent economic times we live in, which are far from turning around at all.

What may happen in the near term with gold is it'll be much more volatile than usual until the decisions - by Asian countries in particular - as to raising their interest rates to combat inflation come about.

That appears to be priced already into the fall in gold prices, although I think the China factor will be the most devastating impact in the near term.

Once that's over with, gold will resume its assent with little in the way to stop it.

Will Potential Gold Bubble End up Being a Silver Rally?

While I don't think a gold bubble is coming any time soon, as there are too many elements involved to support the ongoing increase in the price of gold unrelated to the herd mentality, which will as some time kick in, but probably not for a few years, if not more, depending on the economy and actions of central banks around the world.

What that means for silver investing is the incredible heights gold will probably reach will start to weigh on a large number of investors who simply can't afford to invest in it any longer, or at least perceive they can't.

That inevitably leads to a run on silver from an investment perspective, and should drive the price of silver up to astronomical levels, although that will take time.

Of course silver is driven by industrial use as well, which will also continue to drive up the price of silver because existing mines won't be able to keep up with supply.

Add these two scenarios together and you see a perfect storm for silver prices to rise, and silver has been already making the beginning of a number of major moves reinforcing its coming surge.

George Soros Clueless on Gold and "Ultimate Bubble"

George Soros seems to be clueless on gold and his obsession with it being the "ultimate bubble."

Soros doesn't seem to understand the reason there's support under gold and why that will continue for a long time.

He said to Reuters, “I called gold the ultimate bubble which means it may go higher but it’s certainly not safe and it’s not going to last forever,” although reluctantly admitting it's the only bull market at this time.

One reason Soros asserts this is he's big government socialist, and has out-of-the-mainstream views on politics and life.

Gold interferes with his worldview in that regard, and even though he has millions invested in gold, continues to hammer at it as if it's poised to plunge at any time.

There's no problem with Soros saying gold is an ultimate bubble, as someday in the far future that will eventually play out, especially when investors and the average person on the street all pour their money into it without knowing why, and far past the reason it is going up at this time.

That's the overall practice of fast-moving stocks and bull markets of any kind throughout history.

Where he's completely wrong is in he says gold isn't safe. Gold is safe, but it of course, like anything else, depends on how someone is investing in it, and the degree of overall exposure of their overall portfolio.

The price of gold is going up because of economic weakness and disastrous policies and practices of central banks and governments around the world.

And with the recession continuing on, or at minimum the global economy slowing down significantly, quantitative easing is ready to begin again, which will drive up the price of gold even more.

Of course it's not going to last forever, as Soros says, but that's obvious.

But that's like saying if you live in certain parts of California you're going to experience an earthquake sometime.

Everyone knows that, but you simply need to be prepared for that inevitable moment and respond accordingly. You don't stop living and life because it may happen.

Danger can come anywhere and any time, and safety is always an issue, even when traveling to a neighborhood store.

So to suggest gold isn't safe is like saying living in California isn't safe. What's the point?

As long as the fundamental reasons for the price of gold continuing to rise remain in place, gold prices will continue to rise. It's as simple as that.

when the macroeconomic climate changes, then we all need to remain vigilant with our gold investments.

Gold isn't even close to being in a bubble at this time, as nothing in the global economy has changed to make it be a concern. It will eventually happen, but that is probably a number of years away.

Until governments stop the printing presses and their stimulus plans, gold will continue its upward ride.

Is Gold Getting Too Popular?

Some gold investors are getting a little jittery, as the growing popularity of gold, especially as it becomes increasingly reported on by the mainstream press, has them wondering if we're approaching gold bubble status.

Taking the housing market and Tech stocks of the last ten years or so as examples of bubble markets bursting, we're far from that happening with gold, for several reason.

First is the lag time from information reaching someone, to their digesting it, and finally acting on it. That can take years in some cases to come about; the reasons bubble emerge, as everyone suddenly embraces the herd mentality and bypasses their thinking and go straight to making decisions based on emotion.

That aside, from a practical point of view, the other things related to housing and take was people borrowing to feed the frenzy, which hasn't began to happen yet by ordinary investors, who in general really haven't started putting money into gold.

When the gold investing mania truly begins, we'll see the loss of rational in people, and then their doing almost anything to get their hands on gold, just like they did with tech stocks and homes.

Until the ordinary person on the street starts talking gold and investing in gold, and then going beyond that to looking for ways to borrow even more in order to secure more of the yellow metal, I don't think we'll have to worry about a bubble.

A bubble doesn't exist because gold prices, or any other investment goes up, it exists because the prices of something go up for no reason whatsoever, which what investing mania leads to.

We can't be afraid of gold prices going up, as the underlying fundamentals are there to justify it. We also can't be afraid of temporary corrections, which falsely imply a bubble could be ready to burst, when there is no bubble in the first place.

Now that the mainstream media has finally picked up the gold story, we do have to watch closer, but we still don't see that many ordinary people buying into gold yet. Only then should our ears perk of and our eyes stay open concerning a potential bubble.

And then we need to look to how people are going about buying gold. Once leverage comes into play, we're probably getting close to a bubble, and the bursting of that bubble. Until that happens, we should be safe.

The bottom line is still the fundamentals, and everything happening in the macroeconomic world today justifies the price of gold and it continuing to go up.

Even if it goes beyond where it is expected it should be, we still need to pay attention to whether or not the fundamentals are still in play. If they are, there will still be price support at some point.

And that is what we need to pay attention to more than anything else if and when a gold bubble emerges. We need to know where he entered the gold market, as far as the price of gold, and how long we want to or are able to stay in if it in fact looks like a bubble is forming.

For those buying gold at different price points, we can afford to be more patient in finding out where the support level is, and whether or not to sell, or how much to sell.

GOLD BUBBLE? WHAT BUBBLE?

by Toby Connor

We continue to hear pundits describe gold as a bubble. Certainly it will turn into a bubble before this is all over but we are hardly in the bubble stage yet. In order for a bubble to form you need the public to come into an asset class. The public is pretty dim and it can take 15-20 years before they "catch on". It took 18 before they noticed the tech bubble.

Once they do start to "get it" we will have about a year to a year and a half as gold enters the parabolic stage before the bubble pops. See the Nasdaq chart below from late 98 to March of 2000.

At gold's top, half of your neighbors will be buying gold (not selling like they are doing now).

At the top there will be lines outside the the local coin dealer waiting for the next shipment of gold to come in.

At the top 7 of 10 billboards you see driving down the highway will have something to do with precious metals.

At the top the guy standing next to you in the grocery store will tell you how many thousands of dollars he made last month off his gold coins.

At the top everyone will have become convinced the dollar is toilet paper and will only continue to decline until it has become worthless.

At the top the population will believe that we have to go back on a gold standard. By the way, a gold standard never stopped any country from debasing its currency. In ancient Rome they clipped some of the gold out of the coins. Roosevelt confiscated and arbitrarily revalued gold in the 30's. A gold standard will not prevent a government from trying to get something for nothing by debasing the currency.

At the top stocks will be universally hated and gold universally loved. In reality, stocks will at that time, represent true value. Much more so than a shiny metal with virtually no industrial uses.

At the top smart money will eventually come to their senses and realize that true value (profitable companies making the necessities for life on Earth) are being given away for pennies on the dollar to purchase a shiny metal that really has no intrinsic value.

Here is a chart of the Nasdaq followed by a chart of gold. You tell me, does gold look like a bubble yet?

Of course not!

I think we might be getting close to the Nasdaq 1998 level, but gold is hardly in the runaway parabolic stage where it rallies over 100% in a year. Not to mention that none of the other signs I noted above are even remotely present yet.

But no one needs to worry about a bubble just yet. We need to have at least one more serious correction similar to what happened in `08 or in tech stocks in 1998 to wash out bullish sentiment before we can start the final parabolic run into a true bubble top.

If I had to guess I would say that will occur during the next liquidation event which should be due in mid to late 2012 as the stock market collapses down into the third leg of the secular bear market.

That should mark the next four year cycle low and possibly the nominal bottom for the secular bear market in stocks that began in March of 2000. I expect the selling pressure at that climactic event will also drag gold down into the correction that should separate the second phase (what gold has been in since early '06) from the third and final bubble stage. Gold will quickly recover, like it did from the last selling climax, and when it does this is when we will see the public begin to panic into gold.

Then and only then can we start talking about a bubble.

At the moment I think we are about to enter the second leg of an ongoing C-wave advance that began in September of last year. I'm expecting this leg to take gold to the $1400-$1500 level before experiencing a major D-wave correction.

I'll be monitoring the advance on a daily basis to keep subscribers appraised of where gold is in its intermediate cycle. When I think we are getting close to the top of the C-wave I'll warn subscribers to take profits and exit the precious metals market so as not to get caught in a D-wave correction.

Gold Scents

Gold Prices Down Today as Longs Run for the Exit

Gold prices are falling today as some gold investors take profits and others with long positions get out of the market on fears the general public is entering into the fray, which could create a gold bubble which will burst.

I'm not sure that the person on the street has become engaged in the market yet, as they hadn't as of just recently, but it is a real concern to take into consideration when it does happen.

But even so, because gold has a reason for going up, the fundamentals will support those who don't understand why they're entering the gold market, even if they bid up the prices higher.

Gold has a lot of room to move higher, and the economic conditions, inflation, the EU debt crisis and China inflation, will ensure gold has a lot of room to rise.

Even so, we're always going to have corrections when gold, or any investment, soars quickly, but in the case of gold, there's no fears that it's a bubble about to burst; it simply hasn't reached that level yet.

For example, when the housing market went into a bubble, it was when the general public entered into buying home as outrageous and above-market prices which ultimately led to it bursting. But there was no known or existing reason for the price of houses to go up that high, and it was predicted by many watching the situation that it was going to collapse.

With gold it's different, because the underlying fundamentals warrant an ongoing increase in prices, even if many of those investing don't understand why.

We're far from a gold bubble, or a gold bubble bursting at this time, although eventually that will happen, but it's probably years away. The majority of ordinary investors still say they have no position in gold, and until that becomes a reality rather than an unproven fear, we will be okay.

George Soros' SPDR Gold (NYSE:GLD) Stake Lowered

Earlier in the year George Soros had mentioned gold was a bubble ready to burst, although he failed to include the idea that he had made a huge investment in gold interests, including SPDR Gold Trust (NYSE:GLD).

In a recent required 13F filing, Soros revealed that his Soros Fund Management had cut back on his position in SPDR Gold by 9.6 percent, probably from concerns over the high rise in price of the safe haven metal.

This is probably a mistake on Soros part, but we'll wait and see.

I think the thing that Soros misses is the regular guy on the street hasn't entered the gold bull market yet, and that should protect the upward movement in the gold prices from being a bubble.

A bubble usually occurs in any investment sector when those that don't understand the fundamentals of an investment finally decide to invest in it when it is already full priced.

This normally shoots the price of an investment up, when the support for it isn't there, ultimately creating a bubble. That's what happened in the housing market, as people continued to bid the price of homes up thinking there's no such thing as a ceiling on value.

It doesn't seem that gold has entered this phase at all yet, and even if it did, the fundamentals are there to justify it. There will of course be many corrections on the gold bull market journey, but that won't be a bubble.

Market conditions and the unprecedented spending of money and budget deficits ensure gold will continue rising in price for years to come, with the occasional correction along the way.

Eventually there will be a bubble in gold, just like anything else that has gained favor over a period of time before those that are clueless enter into the fray.

Gold is probably years away from that happening, and the economic conditions will ensure it won't be bursting for any time soon, and will continue on its upward climb.

George Soros and Secret Gold Bull Market Goes On

Secret Gold Bull Market

One of the reasons the assertion that gold is an ultimate bubble by George Soros makes little sense, is he possibly doesn't understand what's really going on in the markets, or he's being the sly fox he is as far as investing goes.

For example, Soros was saying this on one side of his mouth while investing millions in gold mining companies and gold ETFs. So I think Soros was attempting to do some manipulating of the minds there in order to move the market and thoughts in the direction he wants it to go.

The reasoning behind this is Soros almost assuredly knows the general public hasn't been investing in gold, and know very little about it and don't have much interest in it.

Until they come on board in hoards, there's little chance of a gold bubble bursting, as there isn't a bubble without the public entering into the gold investing market.

In reality, most of us who follow gold closely sometimes aren't aware that what is common and everyday to us is mysterious and unknown to the average investor, at least in the Western world.

By the time the average investor comes in, which still may take some time, gold will be much higher and it'll be taken to levels that aren't sustainable and above market prices. That's when we'll have an ultimate bubble.

Until that time, the fundamentals, along with the foibles of central banks and governments around the world are what we need to be concerned with watching.

Once the general public starts to enter the market, that's when we need to be weary. That hasn't happened yet, and I think things will have to get worse, or they get more educated as to why gold is important, before they do come in in droves.

Unfortunately for the uneducated in gold, they'll experience something similar to the housing market because they just can't leave the herd mentality and do the type of research which puts them ahead of the game.

Secret Gold Bull Market