Keeping Our Eyes On Gold
Gold hinted that it might finish the year positively, if not resume its long-term bull market as it laboriously worked its way up from its December 2013 lows. But, alas, it's looking like that's yet another prediction gone the way of so many others this year.
If you remember, the year began with gold climbing from 1180 to over 1300. We started hearing about the gold bull market again, for the umpteenth time since it fell from its 2011 highs. But after touching the underside of 1400 in March, the weight of its rise brought it back down to earth, and after several fits and starts it sank below 1200 at the beginning of October, only to press upwards again past mid-month. Then what looked like a correction of its further ascent suddenly took a dramatic turn for the worse Thursday and Friday.
At this point, with its break below the December lows, we watch to see if it bounces back quickly or not. If not, the correction that began in 2011 may yet seek a new low, with a target somewhere between 950 and 1000. Late buyers of gold, most specifically those who waited for the 2011 highs to be convinced that gold was indeed in a long-term bull market, will most likely give up the ghost if gold falls towards or below 1000, if they haven't already done so. At that point, we should hear the naysayers voices rise to a crescendo, with shaking heads and wagging fingers accompanying a chorus of "I-told-you-so." And at that point, we may perhaps find the bottom to this correction, one which will not announce itself, one which will likely bounce around for a bit until it gathers its strength again to resume the long-term bull market that began in 2001.
So if it's not clear yet, our view remains that gold's downturn from 2011 remains a correction in a long-term bull market, one that has yet to reach its full bloom. We simply haven't seen the typical final stage of a long-term bull market, and for that reason - among others - we never bought the "end of the bull" story that arose after the 2011 drop.
Virtually ever authority we know has been wrong each time gold hints at resurrection, which at first created a wave of uncertainty and anxiety, especially as we've seen many older individuals who lived through the previous gold bull market in the 1970s, and who have an appreciation for gold's role both as money and as a component of an investment portfolio, consistently calling for the end of gold's correction, only to be mistaken, time after time. But after an initial bought of consternation, we simply learned to do what anyone must learn to do when deciding how and when to deploy their cash in hopes of either earning a profit or protecting one's wealth from the Fed-induced steady deterioration of the value of one's dollars: We've learned to accept responsibility for our own decisions, and gained the confidence that comes when you use your reason and common sense and think for yourself.
If you remember, the year began with gold climbing from 1180 to over 1300. We started hearing about the gold bull market again, for the umpteenth time since it fell from its 2011 highs. But after touching the underside of 1400 in March, the weight of its rise brought it back down to earth, and after several fits and starts it sank below 1200 at the beginning of October, only to press upwards again past mid-month. Then what looked like a correction of its further ascent suddenly took a dramatic turn for the worse Thursday and Friday.
At this point, with its break below the December lows, we watch to see if it bounces back quickly or not. If not, the correction that began in 2011 may yet seek a new low, with a target somewhere between 950 and 1000. Late buyers of gold, most specifically those who waited for the 2011 highs to be convinced that gold was indeed in a long-term bull market, will most likely give up the ghost if gold falls towards or below 1000, if they haven't already done so. At that point, we should hear the naysayers voices rise to a crescendo, with shaking heads and wagging fingers accompanying a chorus of "I-told-you-so." And at that point, we may perhaps find the bottom to this correction, one which will not announce itself, one which will likely bounce around for a bit until it gathers its strength again to resume the long-term bull market that began in 2001.
So if it's not clear yet, our view remains that gold's downturn from 2011 remains a correction in a long-term bull market, one that has yet to reach its full bloom. We simply haven't seen the typical final stage of a long-term bull market, and for that reason - among others - we never bought the "end of the bull" story that arose after the 2011 drop.
Virtually ever authority we know has been wrong each time gold hints at resurrection, which at first created a wave of uncertainty and anxiety, especially as we've seen many older individuals who lived through the previous gold bull market in the 1970s, and who have an appreciation for gold's role both as money and as a component of an investment portfolio, consistently calling for the end of gold's correction, only to be mistaken, time after time. But after an initial bought of consternation, we simply learned to do what anyone must learn to do when deciding how and when to deploy their cash in hopes of either earning a profit or protecting one's wealth from the Fed-induced steady deterioration of the value of one's dollars: We've learned to accept responsibility for our own decisions, and gained the confidence that comes when you use your reason and common sense and think for yourself.
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