ՎերլուծությունԱպրանքներ3 Best Historical Comparisons for Gold

3 Best Historical Comparisons for Gold

Our last article compared Ոսկի today with the stock market in the early 1980s.

Today we draw some comparisons between the Gold market at present and the Gold market at various points in the past.

Gold’s status today fits elements of three past situations.

Gold is on the cusp of a major breakout today, although it does not appear imminent.

The last time Gold was on the cusp of a major breakout from a multi-decade base to new all-time highs was in 1971-1972. However, that was artificial as the Gold price was fixed at $35/oz throughout the inflationary 1960s.

The gold stocks could be considered a proxy for Gold before 1971. They made a very significant multi-decade breakout in 1964-1965.

The mid-1960s are also a reasonable comparison from a macro standpoint due to the breakout of inflation after being dormant for many years, very low expected returns in stocks and bonds, and the approaching secular bull market in US stocks.

[caption id=”attachment_15737″ align=”alignnone” width=”300″]c1 Furthermore, the image below, courtesy of @NewLowObserver (with my annotations), shows that the Gold price on the Paris Stock Exchange broke out in 1965.[/caption]

[caption id=”attachment_15740″ align=”alignnone” width=”300″]c2 The Gold price in Paris peaked in 1969 and corrected by 32% over two and three-quarters years. Then, the Gold price in Paris made a new all-time high a little more than three years after the 1969 peak.
This leads me to the second historical comparison: 1968 to 1972. This period is the best comparison to today from a macroeconomic and precious metals correction standpoint. 
After inflation broke out to the upside in 1965, the Federal Reserve hiked rates from 3.75% to 9.0% in 1969. Gold stocks (the proxy for Gold) and Silver peaked in early 1968, over 18 months before inflation peaked.
Depending on where you measure the peak in Gold, it took three and a half years or less than three years to make a new high. (Recall the Gold price in Paris needed a bit more than three years). [/caption]

[caption id=”attachment_15742″ align=”alignnone” width=”300″]c3 Finally, our third comparison is entirely technical.
The recent price action in Gold (and in Silver) strongly resembles the price action following the October 2008 low. Note the rectangles.
Silver has grinded higher but well below the previous peak, while Gold failed to breakout but should consolidate bullishly.  [/caption]

[caption id=”attachment_15744″ align=”alignnone” width=”300″]c4 The most important takeaway is that in a similar macroeconomic situation to today, the precious metals sector required more than a few years to surpass its previous highs. Gold needed three to three and a half years, depending on how you measure it.
Gold is coming up on year three, and it may feel like it will never break to the upside and begin a real bull market.
But study history and consider how well Gold is holding up.
The stock market has broken out, the Fed is not done hiking, a recession is not imminent, and real interest rates, after a historically significant increase, have yet to decline. But Gold closed at $1971 and is 6% from a new all-time high. 
The market knows something. 
Speculators and investors have time to research and uncover the best opportunities while they remain cheap. This correction is also the time to reconsider the strong stocks you missed. [/caption]

 

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Jordan-Roy-Byrne-CMT23
I’m Jordan Roy-Byrne, CMT, MFTA the editor and publisher of TheDailyGold.com and TheDailyGold Premium, our premium publication which emphasizes market timing and stock selection for precious metals investors. I’m a Chartered Market Technician and Master of Financial Technical Analysis. My Masters Thesis, which earned me the MFTA designation was published in the International Federation of Technical Analysis Journal. I earned a degree in General Studies from the University of Washington with a concentration in International Economic Development. In my spare time I enjoy weightlifting, following sports, National Parks, classic mob movies and traveling with my outdoors enthusiast wife. TheDailyGold I started TheDailyGold.com in 2009 although the genesis was in 2005 when I started a free newsletter covering commodities with an emphasis on Gold & Silver. We offer quite a bit of free content here and can help you whether you are a seasoned investor or this is your first time stumbling upon Gold and the junior mining world. First, go here to obtain a copy of our 2019 Book The Coming New Bull Market in Gold: Why Precious Metals Investments Will Flourish in the 2020s and 2030s. From there, we will also send you our weekly newsletter, which includes our latest content and thoughts on Gold and gold stocks. The book contains all of our best research on Gold and lays out what you can expect from the economy, capital markets and precious metals over the next 10 to 15 years. It is very important to me to educate people and help them profit immensely and avoid losing real wealth, which will deteriorate if you hold US-based assets over the next 10 to 15 years. Next, be sure to subscribe to our YouTube Channel as well as our podcasts: TheDailyGold Podcast and the new, 10-Bagger Podcast. Contact I can be reached at Jordan @ The Daily Gold . com (spaces removed to prevent spam). I try to answer every email but emails from subscribers are paramount. We currently are not interested in any advertising and we do not accept any guest posts or sponsored posts.
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