Does this sound too good to be true?
I think it is.
For starters, gold has no intrinsic value except for its use in high-end technology that requires superior conductivity. You cannot eat, drink, drive, sleep gold... you got what I mean.
Gold is not an investment to me because it does not generate cash flows that supports the fundamental value of an investment asset ought to have.
Gold is a inflationary hedge. If that is the case, the gold price has gone too far. The global economy is battling deflationary pressure from economic downturn (except for China serious inflation issue). It doesn't make sense for gold to continue to rise.
Some may say that the gold price goes up even in a economic downturn because it is also a hedge for uncertainty. My response is look what happened to gold in the recent 20% drop of the equity markets. There are numerous examples of gold price going down with the market when a crisis strikes.
The only asset that goes up in a true crisis is US dollar as it is the safe heaven by default not because of its fundamental but its reserve currency status. When everyone fears of return of their capital, they hold cold hard cash in US dollar bills.
I don't see this change any time soon. So when you become a little too complacent with short term stock price rise, check the US dollar index levels. It may give you a hint of what's upcoming.
Everyone has been talking about the safe heaven status of gold and suggest how great this investment is to hedge against both a hyer-inflation scenarios from the money printing and economic uncertainty.
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