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Any Courageous Gold Bears Out There?


Some are starting to argue that gold prices are probably artificially inflated, but as of yet, no one has publicly stepped in with a significant bearish bet.

Editor's Note: This content was originally published on by Ron Weisenstein.

Gold continued its incredible run higher today, as the commodity surged on dollar weakness.

Gold is trading up 0.25%, to $1,374.20 an ounce. The PowerShares US Dollar Index (UUP), which reflects the dollar's value against a basket of currencies, is down 0.6%, to $22.23.

According to a Reuters report, "Gold prices have risen more than 25% this year as the dollar has been battered by expectations that US policymakers will pursue an increasingly loose monetary policy and resume buying government debt to stimulate economic growth."

"It just doesn't seem to matter too much anymore. Dollar up, dollar down ... Investors are choosing precious metals as a safe haven just because they are the only show in town right now," Michael Daly, gold specialist at Chicago-based futures broker PFGBest told the news service.

The correlation between gold and the greenback has increased to a negative 0.54, the strongest inverse relationship since April.

The Reuters report notes that "dollar-denominated gold tends to move in the opposite direction to the US currency. But that inverse relationship was broken earlier this year as investors flocked to both gold and US Treasury debt as safe havens."

With gold continuing to rally, are there any noteworthy dollar bears? George Soros has called gold a bubble, but said he was unsure when it would pop. Others have agreed that gold prices are probably artificially inflated, but as of yet, no one has publicly stepped in with a significant bearish bet.

Interestingly, Frank Tang comments that "interest in gold-backed exchange-traded funds was showing signs of exhaustion, with holdings of the world's largest, SPDR Gold Trust (GLD), declining further on Wednesday. They've fallen some 19.5 tonnes since the end of September.

Still, it's unlikely that many people will step in front of the runaway train that is the gold market.

Shares of GLD are up 0.4%, or $0.57, to $134.64.

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