Monday, 21 December 2015

Can someone please tell me why gold is not in a secular bear market?

21 December 21, 2015 at 9:28 pm GMT:

I really would like any gold market analyst to lay it on the line and tell us why they think that gold is not in a SECULAR bear market, giving us good reasoned arguments for the continuation of a secular bull market, whether technical or fundamental.
I see the current chart pattern as kind of midway between the secular bear market of 1980-1999 and perhaps the cyclical bear in 1974-1976. There seem to be some features from both in the current price action in gold. The timing of this bear market is about the same as for an entire 7-8 year dollar bull market cycle on its historical chart, though gold overshot to the upside when the dollar had already bottomed between 2008-2011.
So gold could have a great upmove on the next USD down cycle perhaps from 2016-2024. That would be nearly a perfect fit. It would also make the entire last 25 years of price action (1999-2024) a gradual version of the 1971-1980 bull market but this time fitting better to the 7-8 year dollar up and down moves.
The sticking point for me is if we have real deflation and real trouble in the EU and Japan and other countries leading to a secular trend change in the US dollar index to the upside, cancelling out its last 30-45 years of devaluations.
Here was some of my other reasoning from another post:
I still can’t make up my mind whether gold is in a cyclical or secular bear market. Oil and platinum for instance obviously have been in secular bear markets since 2008. Gold was late to turn in 2011.
I keep looking at the 2011 top in gold versus the 1980 top and the 2011 top was not so extreme. However, there was less inflation in 2011 than 1980 so inflation adjusted the difference between the two bull moves are smaller than the nominal price values suggest. Gold has been a more liquid market in this bull run with more nations participating, more paper products, more leveraged products and more mine supply than in 1980. So one would not expect a secular bull market top to be so extreme. In the same way, a Dow bubble top now would not be expected to be as extreme as in 1929.
I we look at the current gold bear market, the correction has been less extreme than in the 1980s and for silver this is even more true (silver was down about 90% from 1980 to 1982 alone). However, again, the increased liquidity and diversity of these markets might account for this and not be an excuse to think that we are not in a secular bear market for both, especially if other commodities are in secular bears already.
Eventually there will to be a US dollar bear market cycle and I wonder how it can take the dollar to new lows and gold to new highs considering the mess in the Eurozone and Japan and their increasing monetary debasement. In that case can we expect a dollar down move from 2016-2024 perhaps to produce new highs in gold? I wonder.” 

Originally posted on The Korelin Economics Report daily show here:

Answers on a postcard please either at the above link or at this one:

Monday, 7 December 2015

Bounce in gold - is it now over? Monday 2015-12-07 19:41 GMT

Is the dead cat bounce in gold now over? A bounce that fails to get to a round figure (this time $1100) would be typical of most of the price action over the past 2.5 years.

Further to this, the upmove at the end of last week failed to bring gold back over 1000 Euros. So Euro gold is back in 3 figures again. Kitco has it at 991.78 EUR (-5.50 EUR on the day).

In Sterling, gold bounced at about 700 GBP, breaching below 700 on the last swoon but now at 713.81 GBP (-5.37 GBP on the day). 700 GBP is a key level that has been tested in the last couple of years and breached only very temporarily.

Last Friday was a big up day for gold in all currencies quoted on Kitco but still it is under 1100 USD, under 1000 EUR and I think there is danger to go back under 700 GBP, perhaps for a sustained period of time as gold is already flirting with thee figures in USD terms.

Thursday, 3 December 2015

'Three peaks and a domed house' patterns revisited in gold and silver.

Here they are. These are 3 peaks and a house patterns revisited in gold and silver from August 2011.

The target on silver was $12.44 and on gold it was $1155. As you can see, silver had already made its top near $50 at point Z and was on its way down into the $30-40 range when I annotated the chart. Now it is $14:

Gold has of course already exceeded its $1155 target to the downside as of the end of 2014 and is now at $1060 as of late 2015. Again, this chart was made in August 2011. The breakout happened much later in gold and was much shorter in duration. It was only another month or less to the gold top price of $1920 when this chart was drawn: