May 20, 2013:
The bubble index for the price of gold, shown in the following figures, indicates that gold is undergoing a bubble. Based on my data, although limited to 2001-2013 the bubble index has traveled continuously upward. If I can find better weekly data for the price of gold, then this upward trend can be properly put into perspective. Or, the code may not be properly designed for commodity prices. The price data is not inflation adjusted.
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| Figure 1 |
Figure 1 shows the bubble index for the price of gold. One year window. The red line corresponds to the following (ignore the dates on the graph, they are incorrect):
1. September 8, 2006 – followed by an 8.6% drop shortly after
2. July 19, 2008 – followed by a 28% drop
3. August 19, 2011 – followed by a 13% drop
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| Figure 2 |
Figure 2 shows the bubble index for the price of gold. Three year window. The red line corresponds to the following:
1. July 11, 2008 – followed by a 25% drop
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| Figure 3 |
Figure 3 shows the bubble index for the price of gold. Six year window.
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| Figure 4 |
Figure 4 shows the bubble index for the price of gold. Seven year window.