Gold Bubble? Yes

Posted in Gold

 

Does the rapid appreciation in gold price over the past decade represent a price bubble? In the October 2012 draft of their paper entitled “A Gold Bubble?”,┬áDirk Baur and Kristoffer Glover test for bubbles in gold price over the past four decades. Their test method is purely technical, focusing on price explosiveness and requiring no assessment of fundamental value. They consider also a complementary behavioral explanation of the technical analysis. Using daily and┬ámonthly gold prices in U.S. dollars during January 1970 through August 2012 (see the chart below), they find that: (more…)

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