The price of gold has been high. In fact, it hit a 25-year high recently. Everyone saying it’s time to buy and that prices will go only higher. Everyone is also warning investors to stay away. A pair of articles on MSN Money give you the option of choosing your point of view while having someone support your opinion.
First, Jim Jubak presents the case for gold. He’s happy that not everyone (like me) is convinced that it’s a great time to buy:
If everyone is a believer, there isn’t a reservoir of potential buyers ready to increase demand for shares. You make more money investing in the trend when at least a sizeable minority of investors doubts the trend — or worries that it’s about to come to an end — and resists buying into the trend even while other investors are making money.
Alternatively, Timothy Middleton thinks the recent high is a sell signal, and too many people are fans of the metal:
… [I]n the latest rally, gold has also lost any semblance of fulfilling its traditional role as a hedge against inflation and the depreciation of paper currencies. While gold has gone up more than 35% in the last year, inflation has barely budged and the dollar has actually strengthened.
I smell a showdown in the CNBC corridors.
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