Soros Warns of Gold Bubble
Source: TheStreet (9/15/10)
"Soros summed up his view of the U.S. economy in one word: 'Blah.'"
"Gold is the ultimate bubble," Soros said at a Reuters-sponsored event in New York. "It is certainly not safe."
Soros said he expects a repeat of the historical pattern of bull runs in assets like gold ultimately hitting records, and then suddenly reversing. Gold is currently the only bull market, Soros said, adding that it may continue to rise but "it's not going to last forever." He said it will be interesting to see if gold declines in the coming weeks.
Already today, gold trading appears to be cooling off after surging to record highs this week.
Gold for December delivery was losing $2.70 to $1,269/oz. on the Comex. The gold price Wednesday has traded as high as $1,273.40 and as low as $1,266.80. On Tuesday, gold hit a record intraday high of $1,276.50/oz.—$10 higher than its previous high set in June.
The popular gold ETF, SPDR Gold Shares (GLD), is up $0.06 today at $124.04, trading near its 52-week high of $125.
While typically used as a safe haven to store wealth, gold is not the current choice of the Chinese, who are hoarding oil instead, Soros said. Soros summed up his overall assessment of the U.S. economy in one word: "blah" and said he's concerned about the misguided "fiscal rectitude" emerging in the U.S. and Europe. It is too soon to be winding down stimulus efforts and imposing government austerity programs, he said.