The Gold Bubble Continues to Inflate

Published on Wednesday, 18 November 2009 11:28 Written by Gerard Lerod

New York, Nov 18 (TraderHuddle) – The price of Gold continues to make record highs and this morning gold came very close to breaking $1,150, by reaching an intraday high of $1,149. The Spider Gold Trust (NYSE:GLD), which is the instrument that the majority of investors use to get exposure to gold in their portfolios reached all time highs as well.

The price action in the commodity signals an increase in momentum, with more buyers continuing to come in pushing the price higher and higher.

Dennis Gartman, founder of the Gartman Letter, was interviewed by CNC last Monday. He said that the price of the precious metal will "continue to go up until it stops."  He also mentioned that he felt that gold is in a bubble.

"It is a gold bubble," Gartman told CNBC. He called the trade on gold "mind boggling," but also said he is currently long — or betting gold will go higher.

Although the gold miners outperformed gold on its first leg higher, and historically they outperform gold to the upside, the price of gold now leads that of the miners. As the miners like Yamana Gold Inc (NYSE:AUY) deal with price valuations that make the investors jittery.