Growth in global gold demand is indeed rapid. And another decade of quintupling prices isn’t a certainty. But neither of those facts mean gold is a “bubble” today.

In fact, anyone calling gold a bubble right now is talking through their hat – at best. Take these jokers, for instance, all holding forth in the last month…

Myth #1. “Gold is a crowded trade”

The finance pages are packed with gold headlines, but actual investment levels remain low. In the early 1980s, private-bank clients were expected to hold 3% of their wealth in gold, many times the 0.5% allocation seen across the finance industry today. Even in the bullion market itself, three-quarters of the 500-plus analysts and traders attending last autumn’s LBMA conference in Berlin said they held as little as nothing (“Between 0% and 10%”) of their savings in precious metals. Saturation is a long way off.
Continue reading →