Put very simply, the less faith people have in currency, such as the American dollar, the more value they place on gold, which is then reflected in the market. And the greater the threat or possibility of inflation, the more concerned people become with the diminishing power of their currency.
Gold is in an asset bubble. Everyone wants to buy it, which drives the prices up. This makes it seem like a good investment (since the price keeps going up), so more people want to buy it, which drives the prices up…eventually, someone will realize that gold prices are way too high and they’re being silly, and the whole thing will crash on itself like it has with stocks and tulips before.
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