Straw Poll From Goldman Sachs

Jon D. Markman over at Money Morning believes much the same as I do: gold is on the cusp of a bubble, but hasn't taken off into the ozone yet. In his article "Don’t Miss Out on the Looming Gold Bubble," he passes on this straw poll of hedge-fund managers done by Goldman, Sachs:

On Wednesday night, a friend in the hedge fund business told me about a dinner hosted by Goldman Sachs Group Inc. (NYSE: GS) in London last week where the subject of gold’s value came up. Goldman asked the room full of 15 or so major hedge fund managers to mark down on a piece of paper the price at which they thought gold would trade over the next two years. The consensus answer was an astonishing $4,000 per ounce.

Astonishing indeed. These people aren't gold-stock punters, they're hedge-fund managers. If they see that kind of a rise - more than triple today's already-elevated price - then they likely smell bubble too. To keep the memory green, it was only about six months ago that a forecast of $1,200 by the end of this year was considered daring.

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Money Morning is in the gold-bull camp. Also published there is "7 Reasons Gold Will Surpass $2,500 - And Inflation Isn’t One of Them." Those reasons are: gold-mine production is going down; huge deposits are getting harder to find; investment demand keeps climbing; so is central-bank demand; there's a campaign for gold-backed currencies developing; Asian demand for gold has leapt up; and, gold is in a continuing secular bull market.