Posted by: Armel | June 29, 2010

How high can Gold jump ?

                           

How high can Gold jump ?

Remember that Portfolio Managers can only read what the market writes not what the market ought to say.  With that notion in mind, they can assume that since Gold consumption (jewellry use) is actually down, the recent rise in Gold price cannot be studied with a fundamental approach. In fact, since ownership of Gold bars doesn’t entitle to any kind of interest tranches or payments, then its rise in value is just based on whatever the market participants agree to.  

For some,  this sounds as the begining of a “bubble”  but i’ll say it depends on whether you are swimming with bullions or derivatives.

Armel Njeunou

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