Gold Eyes $2,000 /oz – Is it a Bubble Ready to Burst?

Exert from a very interesting article. Please add your opinion and comments concerning the flucuating price of gold. 

Gary Dorsch SirChartsAlot
	Even the most avid gold bugs, who’ve been stockpiling vast quantities of the barbaric metal for decades, and endured their fair share of panic shakeouts, were probably in a surreal state of “shock and awe,” while watching the price of the yellow metal soar to within 1% of the psychological $2,000 /oz level this week. It’s as if somebody launched a rocket on the Fourth of July. Since then, the price of gold has soared $400 /oz, zooming higher in a parabolic pattern. After all the bullish chatter on the blogosphere over the past decade, Gold, - the so-called barbaric metal, has triumphed over the stock peddlers on Wall Street. Undoubtedly, there will always be snake oil salesmen, - who will tout blue-chip stocks as an effective hedge against currency debasement, and a hedge against inflation. Money managers, whose livelihood depends upon selling equities have been taken aback by Gold’s historic surge, and are at a loss to explain to their clients, why they missed the move. “Gold doesn’t have any intrinsic value,” a bewildered money manger declared. “Investing in gold is irrational because, compared to buying a blue-chip stock whose value rises and falls based on what the company produces, and the profit that it earns,” the equity salesmen says.  Thus, for all the talk of the Gold market being in some type of speculative bubble, that could burst at a moment’s notice, a contrary argument points to the fact that vast legions of money managers, have yet to participate in Gold’s long-term secular bull market. Furthermore, there seems to be a misunderstanding about what drives the value of Gold, which essentially is the reciprocal of the public’s trust in the world’s central banks, and their paymasters, - the corrupt and inept politicians, who drive their economies deeper into debt.  Undoubtedly, the skeptics who find comfort in holding paper currency will soon be writing articles in the media, warning that Gold’s latest upward explosion of $400 /oz in just seven weeks, to $1,900 /oz has all the characteristics of a classic bubble that’s bound to burst. Late comers to the game would be left holding a bag of “Fool’s Gold,” and could suffer big losses if purchases are made now, and losses that might never be recouped, - the skeptics say. Yet the most recent buyers might not be small retail investors, but rather the powerful Asian central banks, that control more than $5.5-trillion of foreign currency reserves. They might be shifting their portfolio holdings, from troublesome Euros and US-dollars, and into Gold.