Might as Well Face the Truth About Gold, Which is...?
The media's take on gold doesn't particularly impart much in the way of useful information; but it does give us some idea of a) what the investment "profession" thinks; b) at times what the general public thinks (i.e., when they think at all). So with the recent decline in the gold price, which broke through long-standing support, let's check in with Bloomberg.com for the latest consensus:
The question to ask now if this: Will the bulls finally give up? It's been a long 4, going on 5, years of bear action. Many bulls have already turned sour on gold. At some point - with the possible exception of those "gold bugs" for whom there's never a bad time to own gold - those remaining bulls will throw up their hands and abandon their dreams of getting rich when the world as we know it collapses and owners of gold will triumph over all, or as the Germans might say, uber alles.
While most media reports really don't amount to very much, as we said at the start, I wonder if this latest blurb might not be telling us something about when this cyclical bear market in gold might be drawing to a close. At some point, enough bulls will capitulate, selling their last remaining stash to the bottom scrapers, and the gold bull market will resume.
Obviously, the thesis that gold's bull run turned bear and that the current trend could continue for another 15-20 years - one theory out there - doesn't appeal to me. While charts in 2011 show a parabolic rise in price before the Great Reversal began, none of the typical characteristics of the last phase of a bull market manifested themselves. In fact, the average Joe, even as gold rose to its heights, likely had no idea what a gold coin looked like or where he might buy one. And unless the established phases of bull and bear have fallen victim to central bank uber-meddling - something that a little part of my brain won't discount - we can only surmise that this fall in price may be the final phase of the cyclical not secular bear, the phase where capitulation takes out the last holdouts and the secular bull market resumes.
So with that in mind, we thank Bloomberg for its latest gold-bash, and wait for the jury to weigh in as the price sinks ever lower. We'll see what happens.
Goldman Sachs Group Inc.’s Jeffrey Currie says the worst is yet to come for gold, and that prices could fall below $1,000 an ounce for the first time since 2009. “The risks are clearly skewed to the downside,” Currie, the bank’s New York-based head of commodities research, said in a phone interview Tuesday.Well Goldman's in the bear camp for sure. So who are we to think otherwise? After all, since its high in 20011, after a ten-year price increase - the longest bull market of any asset class in memory - the price of gold has steadily progressed down. With each bounce-back, the gold bulls would whoop it up and predict a continuation of that mighty 10-year streak but, alas, it was not to be.
The question to ask now if this: Will the bulls finally give up? It's been a long 4, going on 5, years of bear action. Many bulls have already turned sour on gold. At some point - with the possible exception of those "gold bugs" for whom there's never a bad time to own gold - those remaining bulls will throw up their hands and abandon their dreams of getting rich when the world as we know it collapses and owners of gold will triumph over all, or as the Germans might say, uber alles.
While most media reports really don't amount to very much, as we said at the start, I wonder if this latest blurb might not be telling us something about when this cyclical bear market in gold might be drawing to a close. At some point, enough bulls will capitulate, selling their last remaining stash to the bottom scrapers, and the gold bull market will resume.
Obviously, the thesis that gold's bull run turned bear and that the current trend could continue for another 15-20 years - one theory out there - doesn't appeal to me. While charts in 2011 show a parabolic rise in price before the Great Reversal began, none of the typical characteristics of the last phase of a bull market manifested themselves. In fact, the average Joe, even as gold rose to its heights, likely had no idea what a gold coin looked like or where he might buy one. And unless the established phases of bull and bear have fallen victim to central bank uber-meddling - something that a little part of my brain won't discount - we can only surmise that this fall in price may be the final phase of the cyclical not secular bear, the phase where capitulation takes out the last holdouts and the secular bull market resumes.
So with that in mind, we thank Bloomberg for its latest gold-bash, and wait for the jury to weigh in as the price sinks ever lower. We'll see what happens.
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