Deja Vu? Is Gold Just in a Correcting Phase on Its Way to Parabolic Peak of $4,294?

Lorimer Wilson December 1, 2011 Comments Off on Deja Vu? Is Gold Just in a Correcting Phase on Its Way to Parabolic Peak of $4,294? 3,516 Views

The current volatility in the precious metals market doesn’t necessarily indicate a change in secular direction. [In fact,] if today’s gold price was to rise by the same degree over the next 14 months [as it did from the beginning of 1979 into 1980, it would hit $4294/ozt. by Jan 2013! Let me explain.] Words: 420

So says Plan B Economics (www.planbeconomics.com) in edited excerpts from his original article*.

Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) the article below for the sake of clarity and brevity to ensure a fast and easy read. The report’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

The article goes on to say, in part:

The following chart is a snapshot of gold prices during the 1970s. Between January 1971 and November 1978, gold experienced a number of whopping corrections that sent the weak hands scrambling to cash. Many levered players saw their margins decimated and called it quits…

What many at the time failed to realize was that the great bull market in gold had only just begun. Below, I have extended the above chart by only 14 months to include the full extent of the 1970’s bull market (shaded correction periods remain the same to provide context). The additional data encompasses one of the greatest performances gold has ever seen (intra-month data would have yielded even better results, as it would have included the full extent of gold’s rise). The final 14 month 252% rise was the epitome of a parabolic frenzy that every investor dreams of exploiting.

Investors that bailed during one of gold’s many heart-pounding corrections entirely missed the biggest leg of the 1970’s bull market. To put this into perspective, if gold were to rise by the same degree over the next 14 months [from its recent low of $1,700/ozt.] , it would hit [$4,294/ozt.] by Jan 2013. [Using a base price of $1,750 would equate to a future parabolic peak of $4,421/ozt.]

I’m not making a prediction but what I am saying is that heightened volatility and steep corrections don’t necessarily indicate the end of a bull market. In fact, some might argue that scary volatility, by shaking out the weak longs, helps form a base from which a big bull market can rise.

*http://en-gb.facebook.com/note.php?note_id=10150383015290814

www.munKNEE.com is for sale!

Become the editor/publisher of your very own financial site quickly, easily and inexpensively

Contact: Editor [at] munKNEE.com for details

Related Articles:

1. Gold Tsunami: on the Cusp of $3,000+?

Early this year we suggested a 50% rise in Gold to $1860 – $1,920 into mid-year. Now, we see the Gold tsunami realizing an approximate 100% rise that will crest at $3,000+ into the middle of 2012, drowning any doubters in its wake. Below are a number of factors that support that view. Words: 1250

2. Gold: Will it Go to $12,500 – $24,000 – or $39,000/ozt. – by End of Decade? Here’s the Rationale for Each

From questions whether gold is in a bubble to predictions that soaring prices are just around the corner, one thing is clear: a new phase of awareness for gold is upon us. How far might it move before these troubling times are over? [Let’s take a close look at a variety of factors and scenarios before coming to a conclusion.] Words: 5717

3. Update of Alf Field’s Elliott Wave Theory Based Analysis of the Future Price of Gold

The Elliott Wave Theory (EW) gives superb results in predicting the gold price. [While] it is a complicated system with many difficult rules [which] I explain in simple terms in this article, [I have determined that] once this present correction in gold has been completed it should [undergo] the largest and strongest wave in the entire gold bull market. The target for this wave should be around $4,500 with only two 13% corrections on the way. [Let me explain how I came to that conclusion.] Words: 1924

4. Jeffrey Nichols: Gold to Reach $1,850 – Perhaps Even $1,923 – by Early 2012!

Many market participants are wondering why [gold] is not responding more positively to Europe’s never-ending sovereign debt crisis and other worrisome economic and political developments around the world…Technical analysts say that gold must build more support in the $1,750 to $1,800 an ounce range before it can muster enough strength to sustain a meaningful and lasting rally. Sooner or later, [however,] thanks to a continuously improving fundamental picture, gold will register a sustainable advance above $1,800 an ounce, possibly never again to see prices below this level. [Let me explain why I believe strongly that that is the case.] Words: 800

5. What Do Gold Measurements “Troy” Ounce and “Karat” Really Mean?

You have no doubt read countless articles on the price of gold costing x dollars per “troy ounce” or perhaps just x dollars per “ounce” but the difference between the two measurements is significant. For that matter, what’s the difference between a 24 karat gold ring and an 18 karat gold ring? Let me explain. Words: 863

6. How To Avoid Getting Ripped Off When Buying Gold

If you’re trying to invest in precious metals, then stick to bullion coins or bars. Don’t be distracted by numismatics, rare coins, collector’s items, or fancy packaging or grading schemes…Even though I have long warned of the dangers of the industry, it is hard for retail investors not to be led astray by high-pressure salesmen [but] reading this guide is a step in the right direction. Words: 1000

7. Where are We Now in the Bull Market in Gold – and How Many Years/Months are Left?

Gold is in a bull market and, [believe it or not,] so are the gold stocks despite their struggle as a group to outperform gold… but [neither] is anywhere close to a bubble, nor the speculative zeal we saw in 2006-2007. Thus, it begs the question” “What lies ahead and when can we expect the initial stages of a bubble?” To figure this out we first need to get an idea of how long the bull market will last and then where we are now based on various indice analyses. [Below I do just that.] Words: 785

8. Relax! Gold, Silver and HUI Index to Bounce Back to Major Highs in Early 2012

With the present major correction in gold, silver and the mining sector it is important to look at the big picture and see what the charts are saying from a technical fractal relationship with what happened back in 1979 when the last truely major bull run occurred. To date the situation is, frankly, no different than it was back then unfolding just as it should. As a result we can expect MAJOR upward price action in physical gold and silver and in their mining (producers, developers, explorers and royalty streamers alike) in the next few months on their way to their respective parabolic peaks in the years ahead. Read on. Words: 1265

9. Back Up the Truck: It’s Time to Buy Gold With Both Hands! Here’s Why

Since the fundamentals still point to gold’s long-term viability… why [are] investors responding by selling gold…? I was always told not to look a gift horse in the mouth… [so] take advantage of the dip. Words: 880