Hi clo,
It is useful to have an asset class which does well in a fearful climate when other assets are not doing so well.
I am not sure which comes first. The investment. Or the fear. Certainly, once a person is invested in fear they are going to want to spread more of it around. And they are going to be reluctant to acknowledge an improving economy until their interest changes.
Personally, I would be very much afraid of owning an asset like gold if things turn around quickly. When the herd runs back through the gate through which they all entered gradually, then there may be a bit of a traffic jam. And unlike doma, I see his example of non-bubbly behaviour as exactly the opposite: "when the high streets & internet,papers etc are full of ads offering to buy everyone's gold" that's bubbly behaviour writ large. No greater fools left out there.
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