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Gold has been moving within a mega upchannel since 1970 and still has a ways
to go before reaching the top side of this mega uptrend. How high is anyone’s guess but were gold’s price rise to match the 2300% rise realized in the 1970s (and our research suggests we could see the start of the bubble phase by next year) we’d see a $6000 gold price, which would blow the gold price well above the mega upchannel. [Let us explain our conclusions with the use of 2 charts.] Words: 495
So say Mary Anne and Pamela Aden (www.adenforecast.com) in edited excerpts from the Commentators’ Corner of Kitco.com.
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
The Adens go on to say, in part:
If gold stays above $1650…[then] the worst is behind us. Then $1700, $1800 and $1900 will be the next stepping stones in the renewed rise. Record high territory would confirm the making of a strong leg upward.
How High?
How high is anyone’s guess. It all depends on the explosive stage in the bull market. That phase is still to come and Chart 1 provides a good example of this.
As you can see, gold has been moving within a mega upchannel since 1970. The gold rise since 2001 still has a ways to go before reaching the top side of this mega uptrend.
Note on the top chart that gold moved into the upper side of the mega channel when it burst into record territory in September 2009. This was just six months after QE first started in March 2009.
When gold reached the $1900 record level [a year ago] September, the leading indicator (below) rose to the normal high area and it’s been declining since then, now approaching the uptrend and zero line.
This is the meat of the matter… the bottom line. The indicator is telling us that even though gold has risen in a clear consistent bull market for 12 years now, it has yet to reach bubble explosive levels.
Take Note:
Those moves would be more like what we saw in the 1970s. In those days, the full bull market rose 2300%. The current bull market since 2001 has only gained 660%… a far cry from the 1970s level.
There really is no fever like gold fever, and the fever hasn’t started yet. For example, for this bull market to gain 2300%, we’d see a $6,000 gold price, which would blow the gold price well above the mega upchannel.
When?
Chart 2 below shows this comparison well. Today’s bull market has not yet begun to move in bubble explosive conditions but it’s getting closer though and the timing suggests we could see the start of the bubble phase by next year.
The Current Situation
Today, however, the mood is down. Many are discouraged by the decline of the last almost 15 months. It’s really not because of the…decline, it’s the length of time that has taken the enthusiasm out of the bull market.
Don’t be discouraged, though. If this sluggishness lasts [a few more] months it’s fine and new positions should be bought on weakness. Buy on weakness and hold… a good strategy.
*http://www.kitco.com/ind/Aden/20120723.html (To access the above article please copy the URL and paste it into your browser.)
Editor’s Note: The above posts may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
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All assets are overpriced and may drop in value catastrophically. The only asset that is also money is gold and will bridge the transition from depression to renewed growth when the world economy stabalised after the catastrophic failure.