[German Bank: Gold Market may be in a Rational Bubble]
Analysts at the German bank wrote in a report that after last week's better-than-expected US job market data was released, the price of gold saw a slight decline, but quickly rebounded as investors may have seen it as a buying opportunity. The divergence between the price of gold and interest rate cut expectations has widened, possibly driven by investors' expectations of further upward movement in the price of gold. This makes purchasing the asset to lock in profits a rational decision. The report states that the gold market is more likely to be in a rational bubble, as fundamental factors are more difficult to evaluate, although US interest rates remain a key driving factor.
