Hi nde Capital’s Ben Davies had this to say about the gold trade: You’ll know when the bubble begins.
Davies told King World News: “So far this has been a very orderly market, despite the plethora of yahoos greeting new highs. But who really owns gold? The market is so orderly here, it feels like it’s being managed, and at some point the orderly rate of ascent will become disorderly to the upside as we enter into new price discovery.”
Davies has talked before about inflation fears following the rash of currency interventions. He gave a few more comments in defence of gold:
“We are still seeing negative real returns on bond investments. Investors have to ask themselves at some point, ‘Should we move from bonds into gold?’ Gold has no liabilities, or default risk, whereas government bonds these days are accompanied in some cases by tremendous risks.”