Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Semiconductor Sector – Watch the Early Bird in 2019 - 21st Jan 19
From ASEAN Economic Development to Militarization - 21st Jan 19
Will China Surprise The Us Stock Market? - 21st Jan 19
Tips to Keep Your Finances Healthy in 2019 and Beyond - 21st Jan 19
Tips for Writing Assignment in Hurry - 21st Jan 19
UK House Prices, Immigration, and Population Growth Mega Trend Forecast - 21st Jan 19
REMAIN Parliament to Subvert BrExit with Peoples Vote FIXED 2nd EU Referendum - 21st Jan 19
Pay Attention To The Russell Stocks Index and Financial Sectors - 20th Jan 19
Hyperinflation - Zimbabwe's Monetary Death Spiral - 20th Jan 19
Stock Market Counter-trend Extends - 20th Jan 19
The News About Fake News Is Fake - 20th Jan 19
Stock Market Bull Trap? January 22 Top Likely - 19th Jan 19
After the Crash, the Stock Market Made a V-shaped Recovery. What’s Next - 19th Jan 19
David Morgan: Expect Stagflation and Silver Outperformance in 2019 - 19th Jan 19
Why Brampton Manor Academy State School 41 Oxbridge Offers is Nothing to Celebrate! - 19th Jan 19
REMAIN Parliament Prepares to Subvert BrExit with Peoples Vote FIXED 2nd EU Referendum - 19th Jan 19
Gold Surges on Stock Selloff - 18th Jan 19
Crude Oil Price Will Find Strong Resistance Between $52~55 - 18th Jan 19
Stock Market’s Medium Term is No Longer Bullish. It is Now Mixed - 18th Jan 19
SPX and Gold; Pivotal Points at Hand - 18th Jan 19
Fable Media Launches New GoWin Online Casino Affiliate Site in UK - 18th Jan 19
The End of Apple! - 18th Jan 19
Debt, Division, Dysfunction, and the March to National Bankruptcy - 18th Jan 19
Creating the Best Office Space - 18th Jan 19
S&P 500 at Resistance Level, Downward Correction Ahead? - 17th Jan 19
Mauldin: My 2019 Economic Outlook - 17th Jan 19
Macro Could Weaken After US Government Shutdown. What This Means for Stocks - 17th Jan 19
US Stock Market Indexes Reaches Fibonacci Target Zone – Where to Next? - 17th Jan 19
How 2018 Was For The UK Casino Industry - 17th Jan 19
Gold Price – US$700 Or US$7000? - 16th Jan 19
Commodities Are the Right Story for 2019 - 16th Jan 19
Bitcoin Price Wavers - 15th Jan 19
History Shows That “Disruptor Stocks” Will Make You the Most Money in a Bear Market - 15th Jan 19
What Will the Stock Market Do Around Earnings Season - 15th Jan 19
2018-2019 Pop Goes The Debt Bubble - 15th Jan 19
Are Global Stock Markets About To Rally 10 Percent? - 15th Jan 19
Here's something to make you money in 2019 - 15th Jan 19
Theresa May to Lose by Over 200 Votes as Remain MP's Plot Subverting Brexit - 15th Jan 19
Europe is Burning - 14th Jan 19
S&P 500 Bounces Off 2,600, Downward Reversal? - 14th Jan 19
Gold A Rally or a Bull Market? - 14th Jan 19
Gold Stocks, Dollar and Oil Cycle Moves to Profit from in 2019 - 14th Jan 19
How To Profit From The Death Of Las Vegas - 14th Jan 19
Real Reason for Land Rover Crisis is Poor Quality of Build - 14th Jan 19
Stock Market Looking Toppy! - 13th Jan 19
Liquidity, Money Supply, and Insolvency - 13th Jan 19
Top Ten Trends Lead to Gold Price - 13th Jan 19
Silver: A Long Term Perspective - 13th Jan 19
Trump's Impeachment? Watch the Stock Market - 12th Jan 19
Big Silver Move Foreshadowed as Industrial Panic Looms - 12th Jan 19
Gold GDXJ Upside Bests GDX - 12th Jan 19
Devastating Investment Losses Are Coming: What Is Your Advisor Doing About It? - 12th Jan 19
Things to do Before Choosing the Right Credit Card - 12th Jan 19
Japanese Yen Outlook In 2019 - 11th Jan 19
Yield curve suggests that US Recession is near: Trading Setups - 11th Jan 19

Market Oracle FREE Newsletter

UK House Prices, Immigration, and Population Growth Trend Forecast

Why $10,000 Gold Will Not Be What You Think

Commodities / Gold and Silver 2018 Jun 07, 2018 - 12:39 PM GMT

By: Avi_Gilburt

Commodities

For almost 7 years now, I have been actively engaged in the online community relating to investing opportunities. In fact, my first public article about a specific asset was when I called for a top in gold back in the summer of 2011, when most were certain we were about to easily eclipse the $2,000 mark. However, my expectation was that the $1,915 region would likely put a cap to this rally, despite the parabolic rally we were experiencing in gold at the time. And, as we now know, gold topped at $1,921 about a month after my top call.


Since that time, I have not only written hundreds of public articles, but I probably have read much more than 5 times that amount regarding various financial markets.

The one thing that has always stuck out in my mind is that the market rarely does what the majority expect. In fact, most still believe that gold is a safe haven from stock market volatility. While I have attempted to dispel that notion with actual facts from market history, many still hold fast to this fallacy.

During my time writing publicly over the last 7 years, one of the other fallacies that has been brought to my attention is that if gold really rallied to $5,000 or higher, then the world will likely be in terrible shape. In fact, many have gone so far as saying that one would not likely want to live in a world of $10,000 gold. And, I just saw this reiterated again in the comments section in an article recently written by Doug Eberhardt.

So, let’s explore this line of reasoning a bit more.

Back when gold was around $300 almost 20 years ago, many people were saying at that time that one would not want to live during a period of time when gold was at $1,000-2,000. In other words, they made an assumption that a significantly higher price for gold would suggest that the world was in disarray.

Well, for those of us that have been living for the last 10 years, we have seen gold rally from $300 and almost strike that $2,000 region. And, with gold now over 4 times the price it was 20 years ago, we can attest to the fact that the world has not come to an end. Moreover, for those who were truly paying attention, much of gold’s rally from 2002-2011 was accompanied by a rally in the stock market from 2002-2007.

As we now hover around the 1300 region, which is still more than 4 times the $300 level struck in 2002, I don’t hear anyone complaining about how we are now living in a devastating period of time.

At the end of the day, I think many investors have certain notions they have developed about gold and what it represents. In fact, many hold fast to these views almost religiously. Yet, since most of these views are based upon outright fallacy, one may want to simply look at gold as another asset class, rather than impute some over-inflated wrong notion relating to the times in which we live.

If you analyze what gold will do as an asset class well, then you will do well with your investment. If you view gold from an emotional perspective or a perspective not based in fact, then it will likely hurt your investment returns over the longer term. Just remember how most of the market viewed gold back in 2011, and were certain that gold would rally over $2,000. Remember how, at that time, most thought that revisiting the $1,000 region was simply ridiculous?

While I still maintain the expectation that we are on the cusp of a major multi-decade bull market in the metals market, I don’t necessarily expect the world to end. Nor do I buy into the common perspectives held by the overall market, as when most in the market believe something will happen, it rarely turns out that way. While I certainly see some very hard times setting up for our equity markets over the next 20 years, I don’t see the stock market revisiting the lows seen in 2009, whereas I do see the metals market significantly higher in the coming decades.

Just something to think about.

Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.elliottwavetrader.net), a live Trading Room featuring his intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.

© 2018 Copyright Avi Gilburt - 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