Gold - A 40 Year Perspective

By: GE Christenson | Tue, May 20, 2014
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In broad terms, gold was in a bull market during the late 1960s and 70s, a bear market during the 80s and 90s, and back in a bull market since 2001. The important questions are:

Or

My answer is: Gold peaked in 2011, bottomed in June and December of 2013, and should rally for several, and probably many, years into the future.


Why?

Examine the following graph of weekly gold prices since 1977 and the 144 week simple moving average shown in red. The uptrend since 2001 is clear and pronounced. The correction since 2011 is unmistakable.

Gold and its 144-Week Moving Average Chart

Worthy of note from the spreadsheet (not shown) are:


What could push the price of gold LOWER?


What will push the price of gold higher?

I could go on, but the situation is clear. Gold did NOT blow-off into a bubble high in 2011, all the drivers for continued higher gold prices are still valid, demand is huge, supply will be restricted when the western central banks run out of gold or choose to terminate "leasing" into the market, and government expenses, "money printing" and bond monetization are out of control and accelerating.

Gold prices will climb a wall of worry in the years ahead.

 


You may be interested in my comments on Silver and 2011 - here.

 


 

GE Christenson

Author: GE Christenson

GE Christenson aka Deviant Investor
www.deviantinvestor.com

GE Christenson

I am a retired accountant and business manager who has 30 years of experience studying markets, investing, and trading futures and stocks. I have made and lost money during my investing career, and those successes and losses have taught me about timing markets, risk management, government created inflation, and market crashes. I currently invest for the long term, and I swing trade (in a trade from one to four weeks) stocks and ETFs using both fundamental and technical analysis. I offer opinions and commentary, but not investment advice.

Years ago I did graduate work in physics (all but dissertation) so I strongly believe in analysis, objective facts, and rational decisions based on hard data. I currently live in Texas with my wife. Previously, I spent 20 years in Barrow, Alaska, the northernmost community in the United States, 330 miles north of the Arctic Circle.

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