What is the rapid rise in the price of Gold telling us ? Inflation or Imminent StockmMarket Crash ?
Chart: http://www.kitco.com/charts/popup/au24hr3day.html
John Husselbee, who runs "multi-manager" funds for Liontrust, and has been a fund manager for 30 years, said four key indicators were worth keeping an eye on.
“What set the great crashes apart from my perspective were changes – before the market dropped – in what I deem the key indicators of fear: the 'Vix' index, widely known as the fear index; the gold price; the US dollar; and the yield on US government debt,” he said.
“In 1987 and 2008 the first three rose, while yields on US government bonds shrank [meaning that their prices rose] as investors fled to safety. Stock markets are driven by fear and greed, and each of these early warning indicators was a reflection of the fear at the time."