Paul Jacob
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An ancient saying has it that “gold doesn’t stink.” A modern corollary might be: “Investors do.” Well, at least I’ve caught a whiff of something: A short-term fall in the price of gold, soon.

A subset of investors have gone perhaps a bit too whole hog, and the price of gold is now racing upwards at an increasingly unsustainable rate.

It’s an ancient observation: What goes up must come down.

The exceptions are those rare things that reach escape velocity. Gold hasn’t reached that, nor is it likely to.

For some reason, in markets, whenever prices move upward faster, there’s a contingent of investors who believe the price will never go down. I find this weird. A year-and-a-half ago I warned that petroleum prices would come down. I wrote this because I had begun hearing all this talk about how prices would never come down again. We were going to experience high gas prices forever. Environmentalists were pushing this, with “peak oil.” Media people were pushing it, with hysterical news stories.

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So I thought it a safe bet. Oil would come down, at least by the end of summer.

And it did.

Some of my readers hailed me as a, ahem, minor prophet. But I just thought I was articulating some common sense. As a commentator with a daily program titled “Common Sense,” long before Glenn Beck appropriated that Paine-ful phrase for his recent book, I have trained myself to elaborate a common-sense perspective on all sorts of things.

Besides, I had at least one astute economist on my side.

Now, again, I have read the writing on the . . . blog. Daryl Guppy insists that gold has hit a spiraling-upward trend that cannot last, at least in current market conditions, and so will collapse in price soon.

I have no position in gold, save for a wedding band and one very shiny tooth. Nothing rides on this. And I suppose Guppy could be wrong. But what he says makes sense.

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Paul Jacob

Paul Jacob is President of Citizens in Charge Foundation and Citizens in Charge. His daily Common Sense commentary appears on the Web and via e-mail.