[Here is a summary of my]…thoughts on the 2011 gold price peak relative to the last time a long term bull market ended (back in 1980): Long-term bull markets almost always end with a bang, not a whimper, and last year’s price peak was clearly the latter. A 25% rise over a period of about two months last year [does not an] end-of-cycle, blow-off top [make]. No, I think there’s still some room to run for gold if for no other reason than that we haven’t even come close to the “mania” stage that characterizes the end of long-term market moves…[Let me explain further.] Words: 359; Charts: 1
So writes Tim Iacono (http://iaconoresearch.com) in edited excerpts from his original article* entitled That’s Not What The End Of The Gold Bull Market Would Look Like. (Original post)
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Iacono goes on to say, in part:
If the late-2011 peak of just over $1,920 a [troy] ounce [for gold] proves to… [have been] the highest the price of [that] the yellow metal will go for another 30 years or so, it certainly looks nothing like the prior secular peak. Long-term bull markets almost always end with a bang, not a whimper, and last year’s price peak was clearly the latter as shown below.
A 25% rise over a period of about two months last year [does not an] end-of-cycle, blow-off top [make]. No, I think there’s still some room to run for gold if for no other reason than that we haven’t even come close to the “mania” stage that characterizes the end of long-term market moves…
Holders of [gold, gold ETFs and gold stocks] should probably hang…[in there as]:
- Real interest rates remain in negative territory,
- Central banks continue to buy the metal in large quantities, and
- Investors around the world continue to lose confidence in both paper money and the policymakers that control it.
There [may well] have…been 12- or 13-year bull markets before that have ended like the blue curve in the graphic above, but I don’t know of any. That’s all the more reason to think that gold is still just getting warmed up for its main performance to come sometime in the next few years.
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While I know many of you are concerned about the recent sell offs in gold and silver – especially gold and silver stocks – I must strongly caution you not to join in the crowd of sellers. Instead, if you’ve been waiting for a time to add to, or to initiate, a precious metals position, this is exactly what you’ve been waiting for. [Let me explain why that is the case.] Words: 311; Charts: 1
Savers will not stand idly by and watch their savings get wiped out by taxes and inflation….[which] is good news for investors who buy and hold commodity assets today – and it’s also a stark reminder to not be fooled by the short-term head fakes that might make it look like the commodity bull is over. Stay the course – the biggest profits are yet to come. [Here’s why.] Words: 405
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