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