by Michael Ulrich
13. October 2010 23:08
Last week I met with the management of a gold mining company, who were just back from the Denver Gold Forum, a conference where gold companies meet with investors to discuss the industry and its drivers. This year’s conference has seen record attendances and our mining CEO relayed to us that “Denver was buzzing”.
What this should do though is to remind us that the best time to buy gold is not when Denver is buzzing, but when the Denver Gold Forum is attended by one man and his proverbial dog (presumably because everyone else is at the Florida Real Estate Condominium Conference.)
Further evidence that we might be nearing a peak for gold comes from the unlikely source of The Sun (28 Sept) where Page 3 girl, “Peta from Essex” notes “Yesterday I noticed gold futures reached a record $1,340 an ounce after market volatility boosted demand for the metal”.
What gets lost in the gold headlines, is that the metal is actually underperforming most other risk assets (including equity markets and other precious metals) since the recent market low at the beginning of July this year. We should expect this as gold tends to perform in a relative sense only when markets think the world is ending. The F&C UK Mid-Cap Fund no longer holds any gold mining stocks. Bubble or not, there is no need to chase gold when equities remain so attractive.
