With the dollar debunked and Treasuries troubled, the world's other safe haven had no choice but to absorb transient demand and the price of gold reflected that, soaring $300 in the final month of its record run to $1900 an ounce.
The irony is that those who did migrate to metals saw their new hideout become a bailout, while many assets they had fled weathered the storm and went higher.
"Gold was and still is overbought" says Paul Hickey, co-founder of Bespoke Investment Group. "It has only been that overbought a few times in the past...and even after the decline, is still about 8% above its 50-day moving average."
It's not like there weren't warning signs everywhere. Hickey says prior to last week's pop, the current gold bull market ran "a bit over 1,000 days, or more than twice as long as the average bull market in terms of duration, and 2 1/2 times the average in percentage change."
The question now is whether gold is cheap or will it get even cheaper? Is it a safe haven or a risky bet right now?Read More »from Is Gold a Safe Haven or Risky Asset?