Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Price Breaks 3-Month Rule for 1st Time in 11 Years

Commodities / Gold and Silver 2012 May 03, 2012 - 01:11 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleLast time gold fell for 3 months running was March 2001. And so...?

IT HAD BECOME so rare, you could take its absence for granted to buy gold on the cheap.


Between March 2001 and April 2012, the price of gold never fell for 3 months in succession. So expecting "two months max" made for a great signal to buy gold on pullbacks, most recently in Jan. 2010 (your last chance below $1100) and April 2009 (last chance below $900).

That third month just never came. Until April 2012.

Three consecutive months of falling prices to buy gold are rare however you count it. Since 1957 in fact, they've struck only 65 times in a total of 661 three-month periods. And such drops – let's call them recessions to save me having to re-title these charts again – are rarer still in the US stock market.

The S&P has delivered only 55 runs of 3-month drops over the same 55-year period.

As both charts show, 3-month recessions are rarest of all in a runaway bull market. The S&P put in none between 1991 and 1999, just as prices to buy gold put in none between 2001 and spring 2012.

So, is this 3-month tumble the last straw for gold, finally snapping the camel's back after the big hump of $1920 per ounce in summer last year? After all, the big top of Jan. 1980 – after which gold prices spent two decades in decline – took almost a year to deliver a 3-month run of falling prices. Which then came thick and fast after that.

But 3-month declines don't necessarily signal a bear trend. The S&P suffered such falls in each of July, August and September last year – making for five monthly falls on the trot, in fact, over spring/summer 2011. But the US stock index still went on to recover and top that starting level. Just as it went on to recover and blast through its previous highs after hitting a run of 3-month recessions in 1990, not even mid-way through its long 18-year bull run.

Check also the sharp pullback in Dollar gold prices during 1975-76 on our chart above. Gold fell in seventeen of those 24 months, halving from top to bottom and recording ten 3-month recessions, more than during any other two-year period, including the early 1980s or the big Brown Bottom of the late 1990s.

Who was to know, amid that mid-70s bloodbath, that gold was on its way to rising 6-fold again?

By Adrian Ash
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Formerly City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at www.BullionVault.com , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in