Gold - A Look Back, and a Look Forward

By: Peter Degraaf | Thu, Dec 13, 2012
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"History does not repeat itself, but it often rhymes", as Mark Twain noted.

five year weekly gold chart

Featured is the five year weekly gold chart. The green boxes highlight pullbacks from overbought conditions. The blue boxes show the testing of a breakout from below the 50 week moving average. The green arrows point to the expected upward direction upon the completion of this test.

five year weekly gold chart

Featured is the same chart with the focus on the upside breakouts from beneath the 50WMA. The blue arrow points to the last breakout in early 2009. The green line highlights what happened to the gold price upon that breakout. The green arrow points to a similar setup.

"In the absence of the gold standard there is no way to protect savings from confiscation through inflation. There is no safe store of value without gold. This is the shabby secret of the welfare statists versus gold. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process that stands as a protector of property rights" ~ Alan Greenspan in 1966.

daily gold chart

Featured is the daily gold chart. In its simplest form this chart spells 'MONEY'. During the last gold bull market gold rose from $35.00 to $850.00for a 24-fold increase. A similar increase from the low point in 2001 ($260.00), sets up a target of $6,240.00.

"Every minute of every day the central bankers of the world print 2 million dollars worth of currency" ~ Jim Grant

a 'look back' at a gold chart between 2008 and 2009

Featured is a 'look back' at a gold chart between 2008 and 2009. The first green arrow points to the record high gold price reached during March of 2008. The blue arrow points to the upside breakout of the 50DMA rising above the 200DMA. The second green arrow points to a new record high price for gold in October of 2009. It took 19 months for the new high price to occur.

"Gold is the soul of all civil life. It can resolve all things to itself and turn itself into all things." ~ Samuel Butler (British author 1835 - 1902).

weekly gold chart for the past two years

Featured is the weekly gold chart for the past two years. The last all-time high price ($1930) happened in August of last year. Moving forward by 19 months (see previous chart), brings us to March 2013. This is not a guarantee that the new high in gold will be reached during March, but the average gold correction of 10% or more has resulted in a delay of 12 - 19 months before a new record high was established.

During the 'Dot-com' bull market Nortel rose from pennies to $125; Cisco to 82.00; Yahoo to $127; and Microsoft to $60. All four were based on a 'concept'. By comparison 'gold is money!'

Gold real rate of return 2003-2012

This table courtesy Michael J. Kosares show the 'real rate of return' of gold since 2002. The first column shows the steady annual increase and the third column shows the rate of increase after the rate of inflation has been deducted.

Gold closing price at last day of the year:

2000 = $274
2001 = $279
2002 = $348
2003 = $416
2004 = $439
2005 = $519
2006 = $638
2007 = $838
2008 = $889
2009 = $1097
2010 = $1420
2011 = $1566
2012 = (so far $1710)

 


 

Peter Degraaf

Author: Peter Degraaf

Peter Degraaf
http://www.pdegraaf.com/

Peter Degraaf

Peter Degraaf is an online stock trader with over 50 years of investing experience. He supplies a daily market alert to his many subscribers. For a sample copy send him an E-mail at itiswell@cogeco.net or visit his website: www.pdegraaf.com

Peter Degraaf currently resides in Sarnia, ON. Canada with his wife Roberta. He is an avid reader and studies business trends on a daily basis. He has mastered the art of 'Technical Analysis' , which is a vital part of successful investing.

Born in the Netherlands in 1935, he moved with his family to Canada in 1952. He joined the Royal Canadian Navy in 1954, and while in the service, started a coin collection. Soon he began to 'wheel and deal'. Upon his discharge from the Navy in 1959, he turned his hobby into a full-time coin business. During his many years in the coin business, he traveled all over Canada, Europe and the USA, including a booth at the 1964 World's Fair.

While living in Ottawa, during the great gold bull market of the 1970's, his company owned and operated four coin stores in that city, and he became president of the Ottawa Coin and Stamp Dealer's Association. For a number of years he was a contributor to the Charlton Catalogue of Canadian Coins.

In 2001 he semi-retired from the daily routine of buying and selling coins, to trading stocks on-line, and writing articles on investing.

For over 50 years, from the days when gold was trading at $35/oz, Peter has recommended that gold should be included in every investment portfolio. And until the world returns to the gold standard he will continue to recommend it!

His hobbies are: cycling, roller-blading, speed skating, cross-country skiing, singing in a male chorus, writing articles and studying the Bible for spiritual growth.

DISCLAIMER: Please do your own due diligence. Investing involves taking risks. I am NOT responsible for your trading decisions.

Happy trading!

Copyright © 2010-2012 Peter Degraaf

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/