Bad news for gold bugs: Professor Nouriel Roubini, the man who, as the FT puts it, "came to fame for predicting the global crash in financial markets", still refers to gold as a "barbaric relic".
But even worse than that, he thinks our favourite metal is "in part a bubble that could easily go bust". I don't entirely disagree with him.
Almost everything is in a little bit of a bubble, simply because of the low-interest-rate/high-liquidity environment in which we live. And I never expect anything to move in a straight line corrections are par for the course.
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But I still believe that gold is in a long term bull market, one that is still a long way from its end, and one that isn't going "bust" any time soon.
Why? Because the supply and demand fundamentals are good. There is little new supply mine supply has been falling on and off for years, and the central banks who used to regularly flood the market are now buyers rather than sellers. But there is plenty of new demand both from those central bankers and from investors who, thanks to ETFs, now have an easy way into the market.
The key point here, however, is not that there is new demand for gold. It's why there is new demand for gold.
Roubini says that he can only see one scenario in which gold would "rapidly rise in value": one in which "fiat currencies are rapidly debased via inflation". Clearly, he doesn't think that is very likely (or he'd be a gold bug too). I think it's a dead cert. Not this year, maybe not even next year, but at some point before the crisis is fully played out.
That's why I'm hanging on to my gold.
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