Could we be in the middle of a modern day Gold Rush?  You bet we could.

This past week, the price of Gold breached the $1,000 mark, yes that wasn’t a typo.  A level which simply blows out the old high set back in the late 1970s.  Despite the stellar returns consistently achieved over the past few years (returns which have far outpaced the major US Equity Indexes and Fixed Income markets), it appears that much of the media and many analysts either ignore the market or simply have taken the wrong view, citing the danger of buying Gold and the presence of a bubble in the market.  Well, if you have followed the market doctor, you would know that over the past few years the Market Doctor team has been dead on in this market.  The interesting point to note regarding the impressive plight of Gold is that the move has been supported by a number of clear and noteworthy fundamentals.  It is therefore a travesty why more analysts haven’t gotten this one right.

The fundamentals you ask?  Let’s start with the significant and consistent devaluation of the US$.  Secondly, the noteworthy rise in inflation (even with sub-par inflation reporting data series), instability in the US financial markets that includes a questioning of Fed policy and even the quality of ratings on certain security classes, and finally the possibility of a growing middle class in China and India. 

So why is it when the NASDAQ registers over 20% gains over short term horizons, the move is cheered as fundamentally sound.  Even despite the fact that many of those gains are quickly relinquished in a few trading sessions. But when Gold registers over 20% annual gains over the past few years, based on sound fundamentals, the media quickly dispels the market as a bubble.  Maybe they’re just angry they’re not long !!  If you think Gold is expensive, just remember how expensive Crude Oil looked at $50 a barrel.