WSJ Finally Notices Gold Bull Market


"Skeptics' arguments are so feeble that gold bulls should only laugh."

Should we be worried now that The Wall Street Journal has "discovered" the bull market in gold? Relax. This bull market has years to go. It's so powerful, in fact, that it will easily be able to shrug off yesterday's front-page headline in The Journal: Gold Vaults to New High and continue into the ozone. With the gold price up 353% since 2000, WSJ was bound to notice the bull market sooner or later..

A related headline on page two further qualified gold's leap to new record highs as being related to "global worries." This is true, but it overlooks the fact that gold has risen even in the years we weren't so worried. And that is what we like most about the bull market in bullion—whatever investment "story" has been out there over the last decade, gold as an asset class has led the pack. It has flourished during periods of both inflation and deflation worries. The rally has weathered good economic times and bad, high and low unemployment and a secular decline in interest rates. Gold has performed well when corporate bonds were in favor, and when they were not. Its price rose when muni bonds and Treasuries were all the rage, and when both were out of favor. Neither hell nor high water will diminish gold's allure.

How could WSJ not notice when gold's price has quintupled off the lows? But the arguments skeptics are trotting out are so feeble that gold bulls should only laugh. For instance, a J.P. Morgan broker was quoted as saying "a change in investor attitudes could cause a significant correction in gold prices." (This from a spokesman for a firm which, in its role as bullion banker, makes huge profits by lending out gold promiscuously.)

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