Our analysis maintains that the burgeoning move in gold may well exceed earlier surges. The circumstances driving gold in the 1970’s were primarily centered on the U.S. but the issues facing us today are global in nature…[and] have embarked gold prices on a journey that could result in $7,500 and even $10,000+ [per troy ounce].
The comments above and below are excerpts from an article by AG Thorson (GoldPredict.com) which has been edited ([ ]) and abridged (…) to provide a faster and easier read.
Gold prices enjoyed an unprecedented run from 1976 to 1980, gaining over 800%. At that time, inflation was rampant, commodities were soaring, and there were supply shortages in the oil market. Still, it is clear that monetary policies and massive budget deficits were the real cause of the inflation. Sound familiar?
Quarterly Gold Chart
Negative and record low interest rates forced the 8-year cycle in gold to bottom prematurely in 2015, a full year early (it was due in late 2016). The bottom is now confirmed — and we are on the brink of a multi-year rally, similar to what occurred in 1976 (bottom left of price chart).
The Parabolic State
After gold prices exceed the $2,000 level, they will conclusively enter a parabolic state. In the beginning, prices are expected to rise in an orderly manner, albeit enhanced. However, as prices accelerate into the parabolic price curve, you will see a near vertical rise into a blow-off top. At that time, I expect prices to double in very short order. Example: prices increase from $4,000 to $8,000 in just a month or two.
How Long Will The Rally Last?
I expect this promising rally in precious metals to last into the next decade. To be sure there will be elections, policy decisions, and black swan events along the way. Some of which may speed up, or even slow down the timeline. Nonetheless, the year 2022 seems like an encouraging focal point…
When To Sell
…The extremes in precious metals will be unlike anything we’ve ever witnessed. News stories of currencies and economies collapsing will drive fear and speculation. Social media outlets will circulate unfounded rumors; subsequently panic will ensue. Fear will be widespread — and you’ll dread selling even an ounce of gold. What will you do?
If you are courageous enough to invest in precious metals, you’ll eventually contemplate selling. Volatility will reach extremes. Prices may arrive just shy of your target level and then suddenly drop 15%. Your heart will sink; you sell assuming you missed the top. Soon after your order is processed, prices reverse, rally past your original target – and then continue higher. Your stomach churns, you mentally calculate the lost profits. You foolishly consider buying at even higher levels just to get back in.
…You need to be okay with leaving some money on the table. When specific benchmarks or price levels are met, sell into strength, scaling out as it were. Formulate a plan to sell a predetermined amount at each level – have a backup strategy. Remember, you don’t have to sell everything. It’s alright to keep some reserves.
Disclosure: The above article has been edited ([ ]) and abridged (…) by the editorial team at munKNEE.com (Your Key to Making Money!) to provide a fast and easy read.
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