Saturday, November 23, 2013

Bubble in Gold?- A Comparison, Part 2

As a followup to my prior post, I thought it could be illustrative to show the difference between a know bubble's price action and that of gold's, again here exemplified by the GLD.Once again, I show two comparisons of the NASDAQ and gold versus their respective highs. The NASDAQ high occurring in March 2000 and gold's high in August 2011. Here however, I show the slope coefficient of the price changes over the varying time frames and using the high as the starting reference point. The first chart shows the slope of the price rise into the respective high of each asset.

And the second chart shows you the slope of the price decline relative the same high as referenced above on each asset.

What is plainly obvious in each chart is that the slope of the price rise and decline on the NASDAQ, an obvious and well established bubble, is not even in the same ballpark as the rise and fall on the price of gold. Point being, gold was just not in a bubble.

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