Why is gold so bid - is this the start of another leg higher?

[meanreversion]

Gold seems to tick higher, irrespective of other metals and unrelated to the stock market.

Is this just a short term move or is there something more fundamental driving it?

 

[Martinghoul]

Risk aversion and an overwhelming desire to diversify out of paper assets.

 

[meanreversion]

Really? Risk aversion when the stockmarkets are at 18 month highs? Doesn't add up.

 

[Martinghoul]

Well, you know what they say about things that go up?

 

[meanreversion]

Long gold has not been a smooth ride over the last year, that's for certain!

 

[Martinghoul]

I don't know about that... I have been riding mine smoothly since Feb09.

 

[meanreversion]

Nice trade.. I'm about $200/oz late to that party.

 

[Martinghoul]

Yep... Unfortunately, I paid GBP, so it hasn't been quite that juicy, but still.