Best of the Week
Most Popular
1. Best Cash ISA Savings Account for Soaring UK Inflation - February 2018 - Nadeem_Walayat
2.Gold Price Forecast 2018 - February Update - Nadeem_Walayat
3.Bitcoin Crypto Currencies Crash 2018, Are We Near the Bottom? - Nadeem_Walayat
4.Trump Bubble Bursts, Stock Market Panic Dow 1175 Point Crash Analysis - Nadeem_Walayat
5.Gold Corrects, Bitcoin Markets Crash, Whilst Stocks Plunge - Nadeem_Walayat
6.US Treasury Bonds: Fuse to Light the Bonfire - Jim_Willie_CB
7.Dow Falls 666 Points As Cryptocurrencies Crash And Krugman Emerges From His Van - Jeff_Berwick
8.Stock Market Roller Coaster Crash Ride Down to Dow Forecast 23,000 - Nadeem_Walayat
9.Trading the Shadows - Oil, Dollar, Stocks, Gold Trend Analysis - B.R. Hollister
10.Stock Market Analysis: Baying for Blood - Abalgorithm
Last 7 days
The Latest US Debt Blow - 22nd Feb 18
6 Tips For Seamless Business Foreign Exchange - 22nd Feb 18
How to Anticipate Stock Market Trend Changes - 21st Feb 18
Gold Miners’ Rally? What Rally? Watch Out for More Fake Moves! - 21st Feb 18
5 Big Drivers of Higher Inflation Rates Ahead - 21st Feb 18
Goofy Indictments Divert Attention from Criminal Abuses at the FBI and DOJ - 21st Feb 18
Bitcoin or British Pound ‘Pretty Much Failed’ As Currency? - 21st Feb 18
Stock Market Waiting for the Fed - 21st Feb 18
National Identity Demands Restrictive Immigration - 21st Feb 18
Best Opportunities for Freelance Technical Writing Jobs - 21st Feb 18
4% US 10-year Treasury Note Yield Will Be a Floor Not a Ceiling - 20th Feb 18
Governments Are LYING about Their Gold Activities while Mining Companies Cower - 20th Feb 18
No Silver Lining Here - 20th Feb 18
Semi Conductor Stocks SEMI Bearish? - 20th Feb 18
The Prisoner Promised Land - 20th Feb 18
Best Car Dash Cam Review: Z-Edge S3 Dual Dash Cam - UNBOXING (1) - 20th Feb 18
How Inflation Reduces The Real Value Of Social Security Net Of Medicare Premiums - 19th Feb 18
Could Stellar Lumens be a Challenger to Bitcoin for International Payments? - 19th Feb 18
US-China Trade War Escalates As Further Measures Are Taken - 19th Feb 18
How To Trade Gold Stocks with Momentum - 19th Feb 18
Is a New Gold Bull Market on the Horizon? - 19th Feb 18
Stock Market Decision Point! - 19th Feb 18
An Inflation Indicator to Watch, Part 1 - 18th Feb 18
Get on Top Of Debt Before It Gets on Top of You - 18th Feb 18
Will the Stock Market Make a Double Bottom? - 18th Feb 18
5 Reasons Why Commodities Are the Investment Place to be in 2018 - 18th Feb 18
1 Week Later, Stock, Bond Market Risk Remains ‘On’ as 2 of 3 Amigos Ride On - 17th Feb 18
Crude Oil Prices: A Case of Dueling Narratives? - 17th Feb 18
Free 1000 Youtube Subscribers Services - YTpals, Subpals, SubmeNow Test - 17th Feb 18
How to Trade as We Near March Stock Market Top - 16th Feb 18
Bitcoin as Poison - 16th Feb 18
GDX Gold ETF Weathers Stock Market Selloff - 16th Feb 18
Casino Statistics and Demographics - 16th Feb 18
IS Today Thee Stock Market Turn Day? - 16th Feb 18
Huge SMIGGLE Shopping HAUL, Pencil Cases, Drinks Bottles, Back Packs, Toys.... - 16th Feb 18
Tesla Cash Keeps Burning at $320 a Share - 15th Feb 18
Big Conflict Ahead in the Financial Markets - 15th Feb 18
Stocks Extend Rally Off Friday's Low, But Short-Term Exhaustion Near - 15th Feb 18
Stock Market Out on a Limb... - 15th Feb 18
Things Only a True Friend Would Say About Gold - 14th Feb 18
Global Debt Crisis II Cometh - 14th Feb 18
Understanding Crude Oil Behavior - 14th Feb 18
Stock Market is Getting Scary... - 14th Feb 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

This Chart Says Gold Is Beginning a Long-Term Uptrend

Commodities / Gold and Silver 2018 Feb 14, 2018 - 05:27 PM GMT

By: GoldSilver

Commodities

There aren’t many investment scenarios you can point to with any degree of certainty and say, “This asset is going to rise.” Saying so is usually fraught with risk, even if in hindsight it turns out to have been an accurate call.

But there are certainly times when you can see that the odds are heavily stacked in your favor. And we have one of those potential scenarios right now in gold.


It’s a rather strong setup, based on a simple algebraic equation: if A happens, then B is likely to happen. And in this case A equals the direction of the US dollar.

As most readers know, gold and the US dollar are inversely correlated. Which makes sense; since gold is priced in greenbacks, it tends to rise in value if the dollar falls. And vice versa. Like most inverse correlations, it’s not a perfect “one goes up exactly 1.2%, the other falls exactly 1.2%” pairing, but it’s especially accurate over long periods.

So if the dollar has begun a long-term decline, it would be reasonable to expect the gold price to rise during that span.

The US dollar has had some very long, very big declines since the late 1960s.

The average of the three major declines was 35.3% over an average span of 11 years.

And as you can see, it looks like the dollar is rolling over again, starting another one of its long-term descents. This seems supported by the lower highs and lower lows it has exhibited since 1985.

So how did gold perform during these long-term dollar bear markets?

While gold’s rise varied greatly, it rose in all three dollar bear markets. The average gain was 637%.

And by the way, those percentage gains are based on the average annual price, so those returns as an investment were actually achievable (and potentially even greater).

What happened from the mid-80s to mid-90s? You’ll recall this was only a few short years after gold’s biggest rise in modern history (2,328% over 10 years, ending in 1980). So it’s not exactly shocking that gold didn’t rise much after that kind of run. And of course we have the opposite situation today—gold fell for four years, bottoming in 2015, and has risen only 25% since then.

Bottom line, it seems likely that a new long-term bear market is beginning in the US dollar, which would mean gold is beginning a new long-term uptrend. And of course if the dollar falls to its intrinsic value—zero—the rise in gold will be of manic proportions.

What will ultimately happen to the US dollar? And if it does go to zero, what currency will be used and how will transactions take place?

We can speculate on those answers, but odds are we’re going to find out one way or the other. Wouldn’t you want to own lots of gold and silver at that time?

I certainly do, and here’s what I’m buying right now.

Source: https://goldsilver.com/blog/this-chart-says-gold-is-beginning-a-long-term-uptrend/

https://goldsilver.com

© 2018 Copyright  GoldSilver - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 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

6 Critical Money Making Rules