Is Gold in a “Mania”?

Gold is at a new all-time high (but adjusted for inflation is far from that.) But the media only cares about “records” and nice round numbers. Once it hit $900, analysts popped up on tv and in the newspapers to discuss how high gold was and where it was going to go from here.

Why is it that if a stock doubles in a year, no one goes on tv to say it’s a “mania”? Yet MasterCard, Apple and others did just that last year.

But if gold is up 30% for the year- then it’s a “mania.”

I’ve seen the “mania” quote several times in recent days and was surprised, after I did a Google search on the subject, to see that the quote was from the same analyst every time.

Here is one from US News & World Report:

Jon Nadler, a Kitco analyst, meanwhile, expects gold prices to remain high for the first part of the year but predicts a pullback in the second half. “The nearly vertical ascent [of gold prices] is starting to look like a mania phase,” he says.

Nadler said “mania” again in an interview with the AP:

“The funds are really heavily at play … The momentum with gold is almost like mania. We keep wondering how high it will go,” said Jon Nadler, an analyst with Kitco Bullion Dealers in Montreal.

Investors looking to get in on the gold rush can expect continued volatility for the rest of the year, said Nadler, whose firm forecasts a trading range of $750 to $950 an ounce.

If you look up the word “mania” in dictionary.com, it comes up with the following definitions:

1. Excessive excitement or enthusiasm; craze

2. Violent abnormal behavior

3. An irrational but irresistible motive for a belief or action

Is this gold right now?

Maybe it’s just me, but I don’t see it. More people are robbing graves for their copper and cars for their platinum. No one is talking about gold at cocktail parties. Old Uncle Joe wasn’t crowing about his gold holdings at the family holiday dinner.

At some point, gold will be in a mania.

But, for now, any call of a mania is, in my opinion, premature.