As Jim Grant has pointed out repeatedly over the years, no one can predict the future. But I wonder if one day we'll look back and see the news that India has bought half of the IMF's gold stash is a bigger historical milestone than Warren Buffett buying a railroad company.
Or maybe that's an apples-to-oranges comparison.
Putting my cards on the table, I own the SPDR Gold ETF (GLD). So I guess I'd love to see it skyrocket (not that I'm predicting that), though it was bought more as insurance against some sort of devaluation of the US dollar.
And it could be that India's central bank has bought at too high a price. Maybe. Maybe not. I'll just make a few points, off the top of my head:
- I remain convinced a gold bull market started earlier this decade.
- This gold bull market remains intact.
- Gold bull markets usually have a blow-off, crazy, nutjob, mania phase -- which we have not seen.
- India and China look to be buying gold.
- China, from reports I've seen, is encouraging its citizens to buy gold and silver.
- I suspect many central banks in places like Southeast Asia are slowly adding to their stashes of gold.
What does the above tell me? Well, I'm not quite sure and if Jim Grant can't predict the future, I'm darn well sure I can't.
Except for one thing. I won't be selling my GLD stake in the near term.
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