gold mania stage is still ahead

As to where we are on this map today, it’s our contention that the public is still almost completely uninvolved in gold at this point. Increasingly, however, the institutions are. David Rosenberg, who has a large following among the institutions, wrote today that he thinks the Mania stage is still well off, and that gold won’t really gain steam until it hits $3,000. This, despite his being a staunch deflationist.

Of course, we can’t know what the purchasing power of a debased U.S. dollar will be a few years down the road – and it could be worth nothing – which means the price of gold could be literally anything, maybe even one million dollars per ounce.

But Rosenberg is directionally correct that the Mania phase is still ahead of us. Sure we are starting to see increasing media attention to gold, a benchmark on the chart above, but it’s still nowhere the level of coverage the yellow metal used to receive during the latter stage of the 1970s bull market. Back then, the CBS Evening News – in fact, all the major news broadcasts – would, as a matter of policy, display the price of gold right next to that of the stock indices.

At this point, using any corrections to build positions ahead of the Mania phase still makes a world of sense to us.