CONTINUED gains in the Gold Price prove it is now "the leading bull market on earth" says $2.5 billion fund manager Charles Morris of HSBC, speaking to Bloomberg TV.
"You've got a big, liquid asset...You've got low volatility. It's the leading risk trade."
Noting that – unlike in late 2008 – both inflation-linked government bonds and conventional, fixed-income bonds have risen together, "This is not a deflationary signal," says Morris.
"This is a bond bubble."
That's why Morris's fund – HSBC's Global Asset Management's Absolute Return offering – sold out of its 30-year US Treasuries last Friday, he tells Bloomberg, even though he believes a double-dip recession is very possible. Bonds have already risen so high, he argues, "There's got to be something else that does well [in that scenario], and I believe that something is gold."
"We don't think we're in a bubble in Gold Prices," agrees Tom Kendall, vice president of commodities research at Credit Suisse – and also speaking to Bloomberg.
"A lot of the recent dips have been relatively shallow and very well bought," says the Swiss investment bank's senior analyst.
Driving the Gold Price higher are "fears over the direction of policy in the United States and over the direction of major currency pairs," Kendall believes.
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