Gold 'A Bubble Poised to Burst,' Wells Fargo Argues in New Note

By Midnight Trader,  August 16, 2011, 03:29:21 PM EDT

Citing speculative demand it believes has created a "bubble that is poised to burst," Well Fargo & Co. says it "feels compelled to ring the warning bells," according to a new report released today by the San Francisco-based bank.

Gold stocks are down about 0.5% this afternoon, holding up better than most of their peers on a bad day for TSX-listed stocks. The declines come despite another rally for bullion on the world metal markets, with the December contract currently up more than $28 at $1,786.40 an ounce.

Holdings in exchange-traded products backed by gold rose to a record 2,217 tons on Aug. 8, Bloomberg data show. CME Group Inc. said volume in Comex gold futures and options rose on Aug. 9 to a record 504,368 contracts. That topped the previous all- time high of 469,689 contracts on July 28, 2010.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Commodities

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