Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Stocks Don’t Care About Trump Impeachment - 17th Oct 19
Currencies Show A Shift to Safety And Maturity – What Does It Mean? - 17th Oct 19
Stock Market Future Projected Cycles - 17th Oct 19
Weekly SPX & Gold Price Cycle Report - 17th Oct 19
What Makes United Markets Capital Different From Other Online Brokers? - 17th Oct 19
Stock Market Dow Long-term Trend Analysis - 16th Oct 19
This Is Not a Money Printing Press - 16th Oct 19
Online Casino Operator LeoVegas is Optimistic about the Future - 16th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - Video - 16th Oct 19
$100 Silver Has Come And Gone - 16th Oct 19
Stock Market Roll Over Risk to New highs in S&P 500 - 16th Oct 19
10 Best Trading Schools and Courses for Students - 16th Oct 19
Dow Stock Market Short-term Trend Analysis - 15th Oct 19
The Many Aligning Signals in Gold - 15th Oct 19
Market Action Suggests Downside in Precious Metals - 15th Oct 19
US Major Stock Market Indexes Retest Critical Price Channel Resistance - 15th Oct 19
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools - 15th Oct 19
British Pound GBP Trend Analysis - 14th Oct 19
A Guide to Financing Your Next Car - 14th Oct 19
America's Ruling Class - Underestimating Them & Overestimating Us - 14th Oct 19
Stock Market Range Bound - 14th Oct 19
Gold, Silver Bonds - Inflation in the Offing? - 14th Oct 19
East-West Trade War: Never Take a Knife to a Gunfight - 14th Oct 19
Consider Precious Metals for Insurance First, Profit Second... - 14th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - 13th Oct 19
The Most Successful IPOs Have This One Thing in Common - 13th Oct 19
Precious Metals & Stock Market VIX Are Set To Launch Dramatically Higher - 13th Oct 19
Discovery Sport EGR Valve Gasket Problems - Land Rover Dealer Fix - 13th Oct 19
Stock Market US Presidential Cycle - Video - 12th Oct 19
Social Security Is Screwing Millennials - 12th Oct 19
Gold Gifts Traders With Another Rotation Below $1500 - 12th Oct 19
US Dollar Index Trend Analysis - 11th Oct 19
China Golden Week Sales Exceed Expectations - 11th Oct 19
Stock Market Short-term Consolidation Does Not change Secular Bullish Trend - 11th Oct 19
The Allure of Upswings in Silver Mining Stocks - 11th Oct 19
US Housing Market 2018-2019 and 2006-2007: Similarities & Differences - 11th Oct 19
Now Is the Time to Load Up on 5G Stocks - 11th Oct 19
Why the Law Can’t Protect Your Money - 11th Oct 19
Will Miami be the First U.S. Real Estate Bubble to Burst? - 11th Oct 19
How Online Casinos Maximise Profits - 11th Oct 19
3 Tips for Picking Junior Gold Stocks - 10th Oct 19
How Does Inflation Affect Exchange Rates? - 10th Oct 19
This Is the Best Time to Load Up on These 3 Value Stocks - 10th Oct 19
What Makes this Gold Market Rally Different From All Others - 10th Oct 19
Stock Market US Presidential Cycle - 9th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

What If Gold Is NOT In A New Bull Market?

Commodities / Gold & Silver 2019 Sep 16, 2019 - 05:13 AM GMT

By: Kelsey_Williams

Commodities

What if it’s not a new bull market for gold? What if gold prices are going lower – not higher?

Think it can’t happen? Think again.

In December 1987, gold prices stood at just over $500.00 per ounce. They had been on a tear for the previous three years after hitting a post-peak low of just under $300.00 per ounce in February 1985.

The increase in gold’s price of $200.00 per ounce may not sound like much, but it represents a sixty-seven percent increase over that three year period. Coming on the heels of a similar percentage decline after reaching an all-time high of $850.00 per ounce in January 1980, it was a welcome salve for those who had been wounded so severely.


Proclamations of a new bull market were abundant.  Expectations for exceeding the old highs had some investors fantasizing rabidly. They were rudely disappointed.

Within eleven months, gold’s price was back below $400.00. By November 1988, gold was at $390.00 per ounce, a decline of twenty-two percent. It didn’t stop there.

A pattern of sideways to lower prices continued until August 1999, when gold traded at $256.00 per ounce – twelve years after its post-peak recovery high of $502.00 per ounce. That is a decline of nearly fifty percent for the twelve years, and a decline of seventy percent from its then all-time peak of $850.00 per ounce.

All told, the bear market for gold prices lasted twenty years; and even after reaching its low of $256.00 per ounce, it did not trade above $300.00 per ounce for most of the next three years.

On the chart below, there is a box around the years and price action of gold from January 1980 to December 1987. There is another box around the years which include gold’s price peak in August 2011 and it’s recent high of $1545.00 in August 2019.

Both periods are identical in length – eight years. Also, both periods began with all-time highs and included low-points and recovery high points which occurred over similar time frames…

(source: macrotrends.net)

First Box: A low point for gold of $298.00 was reached in February 1985, five years after its January 1980 peak. The subsequent uptrend took its price back up to $500.00 three years later, in December 1987.

Second Box: The low of $1050.00 came in December 2015, four years and four months after the August 2011 peak. The uptrend since then has brought us to the recent high of $1545.00 last month, August 2019.

The rally in gold’s price from its post-peak low of $1050.00 to its recent high of $1545.00 amounts to forty-seven percent. That is considerably less than the sixty-seven percent of thirty years ago; but the time frames are identical and the price action is reasonably similar.

A continuation of the relatively similar pattern to that which occurred thirty years ago could take gold’s price down to below $800.00 per ounce. Ouch!

That is not a prediction. However, if you are ardently bullish about gold, you might want to revisit your expectations. Are they realistic? Or are you being carried away by a tide of emotional optimism?

Even if gold doesn’t sink to new lows, it could trend downwards and sideways for many years. After reaching $500.00 in December 1987, gold dropped sharply, then traded for the next ten years between $300.00 and $400.00.

In today’s dollars, that would be the equivalent of gold dropping back to about $1200.00 per ounce initially, then meandering somewhere between $1000.00 and $1200.00 for the next decade.

Here is the bottom line. After reaching its post-peak recovery high of $500.00 per ounce in December 1987, gold did not get back above $500.00 per ounce until December 2005, eighteen years later. And, it did not exceed its previous all-time high of $850.00 per ounce until January 2008.

Are you in gold “for the long haul”? Can you wait twenty more years to see gold’s price at a new all-time high?

Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED!

By Kelsey Williams

http://www.kelseywilliamsgold.com

Kelsey Williams is a retired financial professional living in Southern Utah.  His website, Kelsey’s Gold Facts, contains self-authored articles written for the purpose of educating others about Gold within an historical context.

© 2019 Copyright Kelsey Williams - 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.


© 2005-2019 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