First, let’s focus on the good news. The good news for gold bugs is that Apple (NASDAQ:AAPL) is going to be featuring a $10,000 version of its Apple watch made of gold. Every time you put the words “Apple” and “gold” together, there is sure to be speculation. Just judging by the online investing message boards, there’s been a lot of talk about a potential run-up in gold prices due to interest in the Apple watch.
This is wishful thinking. First, even if Apple used a significant amount of gold for its top-line watch, this particular version of the Apple watch rolls out at $10,000. The market for that watch is going to be quite limited. There’s a reason why Rolex watches and other high-end luxury watches haven’t exactly skyrocketed the price of gold. It’s all about pricing and economics.
I seriously believe that a lot of gold bugs are desperate for any kind of good news regarding industrial uses or jewelry uses for their favorite precious metal. I can fully relate. When you’re in the middle of a desert, and it seems that nothing but bad news is headed your way, even the glimmer of a possible hope or a wish of a potential upside is sure to get you excited. Well, I’m sorry to break it to the gold bug crowd that it’s a mirage. Don’t expect the Apple watch to be the savior of gold.
The good news is that we are living in a bubble economy. It’s only a matter of time until any of the current inflated bubbles burst and set off a chain reaction. My bet is that it will be all be triggered by an unforeseen event. That’s right—a black swan. Consider yourself warned.
The run-up to such an event or the period immediately after such an event is the best time to pick up gold. Currently, gold is that unwanted stepchild as far as investments are concerned. Gold is being beaten up so badly that it is starting to look really, really attractive. Considering that we are awash in cheap paper assets, gold is definitely an attractive alternative investment.