CHART ANALYSIS: KEY DATA TAKEAWAYS
Average Gold Bull Market: Starting in 1971, we've had six boom cycles, lasting an average of 60 months, with the shortest ending after 13 months and the most moderate yielding a 71% return.
This current one is already 28 months into it, so we know it is only halfway through, statistically speaking, but gold is only up 22.7% for the period, so we are in for one legendary move, even if it only scrapes the 71% total return mark - gold needs to make up for under-delivering.
Remember, gold bottomed at $1,053, after a 40% drop. If it only rallies 71%, the worst bull market thus far, it has an additional $507 to go.
Bull Markets Are Shorter Than Bear Markets: Notice how all the bear markets are brutal, taking gold down -21%, -44%, -57%, -48%, and -40%. But then, on the flip side, notice how the swift bull markets are much more epic, rallying gold by +241%, +94%, +541%, +71%, +590%, and the current one we're in, a modest +22.7%.
In 2017, we saw no volatility in the stock market, whereas 2018 is highly volatile. In 2017, we saw a roller coaster cryptocurrency rally, whereas 2018 is mostly tame, after the crash.
Storms are followed by mild weather, and peace is followed by war.
There is no connection between a recession and the price of gold: Though I hear countless YouTube "gurus" predicting higher gold prices, due to a recession in the U.S. or in the global economy, do not fall into this silly trap.
There is no statistical cause and effect relationship between these two events – a gold bull market and a recession are uncorrelated.
Gold, historically speaking, is highly responsive to negative interest rates, as are measured by the FED Funds Rate deducted by inflation.
We are heading into a period of much higher inflation with moderately higher interest rates, so gold prices are destined to go even higher, but not modestly at all.
There has never been a rally, which ended with a +22.7% end result.
Today, it is the largest debtor nation in history. Politicians have screwed up so badly that to say they spend like drunken sailors would be an insult to the sailors. |