The idea is absurd. In today’s Denver Post, just like everyday, there are two outfits running full page ads asking/begging to buy your gold and silver. These ads are not cheap to run, which means there are plenty of people out there unloading their bounty. DEFINITIONALLY, an asset class is in a “bubble” state of being when the masses can’t buy enough of an asset class. The most recent and obvious examples are the internet stocks of the late 1990’s thru April 2000 and the housing market. With housing, there were bidding wars among buyers of crappy homes that had already quadrupled in price, buyers typically owned multiple homes and were looking to buy and flip and leverage was being used to the fullest possible extent. THAT is a bubble. THAT state of being does not exist in the metals markets. It’s that simple.
Here’s some support for my view from James Turk, one of best market analysts I have ever come across in 30 years of involvement in finance:
We finally broke through resistance of $1,440 and in my opinion we’re starting to see the beginning stages of an upside explosion in gold. It’s sort of amazing to think Eric that here we have gold at record highs and it still hasn’t yet caught the public’s attention.
Here’s the LINK to the full text of Turk’s comments.
In fact, not only is the general public a better seller of gold and silver, rather than chasing the prices higher as buyers in true bubble form, but big institutions have not yet moved into the sector. GLD exposure does not count – or any ETF for that matter except the Sprott trusts – because the ETF’s are nothing more than paper investements. You need to have the ability to take delivery of the physical metal at your command in order for it to be considered a true purchase, or transfer of ownership/title transaction. Anything else is fiat paper. Here is a perfect, factual illustration of my point – I sourced this chart from Casey Research (edit in red is mine):