Mainstream Media Late to the Gold Party

Gold is on track for its best monthly performance in a decade. The money metal reached $1,180 earlier this week, another all-time high. There’s buzz that India, which bought 200 metric tons of gold from the International Monetary Fund earlier this month, might well buy the rest of the 203.3 metric tons the IMF has put up for sale.

A gold run-up like this perks up the ears of the mainstream…and that often gets our contrarian impulses tingling. MarketWatch took note this week of the interest in gold among big-name hedge fund managers. Good for them. MarketWatch is only 10 months behind us in noting David Einhorn’s interest, and seven months late catching onto John Paulson’s stake in South African miners and the gold ETF.

All of this is fueling talk of a “bubble” in gold. To our friend James Turk, this signals that gold has begun only stage two of a three-stage bull market. “Don’t be misled by what you may hear or read in the mainstream media, and even much of the alternative media,” he writes. “After all, how many commentators have correctly identified gold’s bull market, now a decade old?” Or for that matter, how many correctly identified the tech bubble in the ’90s or the housing bubble this decade?

“Gold has moved from apathy and neglect – stage-one characteristics – to growing attention. But importantly, instead of embracing gold and analyzing it to determine relative value, today’s attention is one of widespread disbelief and skepticism that gold can climb higher. These are exactly the responses one should expect to emanate from stage two.”

“As gold climbs higher, we will eventually enter stage three. The timing of its arrival cannot be predicted, but we will know it has arrived when commentators who have been consistently wrong about gold will be telling everyone willing to listen to buy gold.”

About Addison Wiggin 88 Articles

Affiliation: Agora Financial

Addison Wiggin is the editorial director of The Daily Reckoning, and executive publisher of Agora Financial, a multi-million dollar financial research firm and publishing group based in Baltimore, Maryland. His second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated.

He is also the executive producer of and a writer of I.O.U.S.A. a feature length documentary film nominated for the Grand Jury prize at the 2008 Sundance Film Festival. The film is inspired by the international bestsellers Financial Reckoning Day and Empire of Debt, which he coauthored with Bill Bonner.

Visit: The Daily Reckoning

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