I used to write regular articles on gold and posted them on a number of gold oriented web sites. I had a strong following which caused me to accept an invitation to talk at the Gold Symposium in Sydney in November 2011. My main purpose was to talk about 2 things, the serious lion attack on my son Richard and the amazing prophecy on the gold price that I received as a result.
By Alf Field as an exclusive for munKNEE.com – A site for sore eyes and inquisitive minds.
I was also anxious to expand on my experience with the Elliott Wave theory as it applied to the gold price. I made a number of very bullish forecasts at the Gold Symposium (read his edited and abridged speech in 2 parts here and here) about the gold price which were based on a continuation to the bull market at that time. Unfortunately those forecasts were proved to be wrong and eventually I had to accept that the gold market was in a bear market and that it would continue downwards for some time.
I had egg on my face and felt very upset that I had caused losses to many people. Rather than own up to my mistakes, I just stopped writing articles on gold. I was reluctant to make any further forecasts that would probably be wrong. I wanted to wait until things clarified and I had a better grasp of what was happening to the gold price.
I would now like to apologise for that period to anyone who was badly impacted by those incorrect forecasts. I would also like to explain what happened to gold after that 2011 peak and make some suggestions as to what might happen now.
It is important to firstly understand what currency you choose to value your gold in. Generally this will be your home currency. For me it is the Australian dollar. If I sell my gold, I will receive Australian dollars and I make purchases in Aussie dollars. Most people use the USD as their yardstick. That is fine if you are in America or reside in a country with a weak currency such as Argentina, Brazil or other South American countries. In Venezuela or Zimbabwe or similar countries, you would be happy to have had your assets in gold rather than the local currency.
On August 23rd 2011 I made a phone call from Sydney airport to my broker to enquire what the gold price was. It was USD $1910, a new all-time high. I had previously sold some gold on the way up, at $1600, $1700 and $1800. I was anticipating a big correction and was shocked by the new high above $1900. That felt instinctively like THE top of the bull market.
I placed an order to sell another 10% of my gold position which sold immediately at $1910. My flight was to Cairns in northern Queensland from where I was scheduled to spend 10 days in the outback without any communication of any description available.
When I got back to civilization I discovered that the gold price had suffered a sudden $200 drop, so I gave myself a pat on the back. I was not so happy when I saw my contract note when I got home and discovered that the $1910 price in USD had converted to just $1700 in Aussie dollars. The Aussie dollar was some 10% stronger than the USD at the time. This is depicted in the above chart of the gold prices in both currencies over the past 10 years. The blue line is the AUD gold price and the red line is the USD gold price. It took 5 years for the gold price to register a new all-time high in Aussie dollars.
It has taken a lot longer for the USD gold price to register a new high above $1910. It happened a couple of months ago.
The monthly below depicts prices back to 1996.
I would now like to explain what happened after the peak price around USD$1910 at the end of 2011. From the S1910 peak I was anticipating a correction to perhaps $1500 per ounce and then another sharp move up to new highs. That didn’t happen, as can be seen from the above chart. When the gold price dropped sharply below $1500, I was lost. I didn’t know what was happening. Eventually I realised that we were no longer in a bull market, but had a big bear market to deal with.
I was lost and decided to just watch what transpired. This situation continued for many months until one day I drew in the red line between A and B on the chart. It was clearly a triangle. What was a triangle doing at that stage of the bear market? I was hugely relieved as I knew that a triangle allowed me to fix where we were in the bear market.
Triangles always occur as the penultimate move in a sequence. That meant that there would be one further down movement to the end of the bear market! Triangles are interesting as one can estimate where that final move is likely to end.
The method is to measure the vertical base ($250 in this case) and deduct that from the apex of the triangle, approximately $1300 in this case. Deducting $250 from $1300 produced a number of $1050, which I knew would be the approximate end of the move, and the end of the bear market. It turned out that the final low point as actually $1046, so $1050 was not a bad estimate. I didn’t publish any of this as I was still nervous about putting anything in writing but I certainly stocked up on gold bullion and gold shares at that time, which was at the end of 2015. The next year witnessed a very big up move, particularly for the gold shares. Gold did rally strongly within the year from $1046 to $1367.
The weekly chart above shows the long 4 year base built below $1380. It was June 2019 before gold broke above that $1380 resistance level and literally took off in a new bullish phase. This move broke to a new all-time high at $2077 in August this year, well above the 2011 peak of $1910. It is now consolidating in the $1850 to $1950 range, building a new base from which to launch another move higher. Given the vast amounts of new money being created in countries around the world to combat the negative economic effects of the Corona Virus, one would have to think that this move higher could be swift and violent. People keep asking me for my estimate of where the gold price could go, but I keep dodging the question, as nobody can know this.
I am relying on the prophecy I received on gold 20 years ago. I mentioned this in my talk at the Sydney Gold Symposium in 2011, but I will repeat the basic story here. My Son Richard was viscously attacked by a lion in April 1999. He was lucky to survive his injuries. We were living in London at the time and requested our Parish priest to organize prayers for Richard’s recovery. As a result we got to know him quite well.
The priest was a self confessed “cricket tragic”. He loved the game of cricket and when the English cricket team visited Australia for the “Ashes” series against Australia, he would visit Australia so that he could go to the matches in person. After the lion attack we moved back to Sydney and the priest wrote to us asking to visit us for a couple of days after the Sydney test match.
In due course I picked him up from the Presbytery at the Sydney cathedral where he was staying. It was an hours drive to our home on the northern beaches, so we had plenty to time for conversation. He asked if I had done anything special recently and I said that I had just made a major change to our family investments. I had sold out some unquoted assets and made a major investment in gold and gold shares.
He wanted to know why I had done this and I explained that the world seemed to be heading for a financial disaster which would cause Governments to create vast amounts of new money to rescue the financial system. I anticipated that this would cause a significant rise in the prices of gold and gold shares.
He asked what the gold price was then and when I told him that it was USD $300 per ounce, he seemed satisfied, and moved on to a different topic of conversation. The next morning he and I went for a jog on the beach during which he asked if I believed in prophecy. I hadn’t really thought about it but the Bible was full of stories of people who did have the gift of prophecy, so I said that I did believe in prophecy.
He then proceeded to tell me the following amazing story.
- He said that in his London parish there was a lady who really did have the gift of prophecy. She had received a number of prophecies related to the priests life and they had all turned out to be correct and helpful to him.
- A month or so before he left for Australia he received a phone call from this lady who said that she had received an amazing prophecy. She had been told to write it down and mail it to the Priest. When he received it he was instructed to put it unopened in his desk drawer. She would advise him later when to open the letter.
- In due course the letter arrived and he stored it in his desk as instructed.
- Shortly before he was due to leave for Australia on his cricket trip, he received a phone call from the lady to say that it was time to open the letter. He did so and the letter contained just one sentence: “Gold will rise to incredible heights”. He was puzzled, not knowing what to do with this prophecy. He certainly was not going to invest the Parish funds in gold or gold shares so he put the letter back in his desk and proceeded to the airport to come to Australia.
- From what I had told him in the car about investing a large proportion of our family funds in gold and gold shares, he concluded that: This prophecy must be for you.
I puzzle about where the gold price might rise to over the next year or two so I feel I should just rely on the prophecy that I received and say that gold will rise to incredible heights. Why should I guess a number which I know will be very large in the current circumstances when I have this prophecy.
What does “incredible heights” mean? Obviously very much higher than where the price is today.
Other Articles by Alf Field:
Everyone must be wondering where this “unprecedented global financial crisis”, (the World Bank’s words), is heading. What follows, for what they are worth, are my cogitations on this crisis. Words: 1641
When the supply of something is increased sharply relative to demand, the value of that commodity will decline. If the supply continues to increase rapidly and indefinitely, then that item will become worth less and less, with the potential to finally become nearly worthless. This is the Developing Disaster facing the US Dollar and the world. This is the factor that could become the single most important criterion in investment allocation decisions and possibly even for individual financial survival…[Let me explain this further by reviewing the 7 major problems facing the U.S. (and thus the world) and how they all will lead to problem #7 – devolution.] Words: 1520
The onset of the world’s worst financial crisis in many decades is one of the most important factors (if not the most important factor) currently influencing investment decisions. The crisis has created chaos and confusion. Not many people understand how the world has arrived at this unfortunate situation. This report endeavours to identify the underlying causes of the crisis and explains why the USA current account deficit has been the main destabilising force in world finance. Words: 3806
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