Tuesday, 1 May 2012

Gold Walks A Familiar Path

Gold Repeats A Prior Pattern

We are now entering the initial upward phase of the next iteration of this cycle, which is a period when big gains for gold prices are typically seen.  A few months from now, we'll get to worry about just how this cycle's important mid-cycle low might have an effect on gold prices, but that is not the issue to be concerned with at this time.  Instead, we want to locate the true major cycle bottom in gold prices, which can arrive a month early or late and still be considered "on time" in the history of this cycle.  We also want to catch the initial upward phase of the new cycle, which is when the biggest gains are usually seen.

Having the 2005-06 pattern as a guide can help us see where all the dance steps are from a complete prior instance, and let us see how the current market is following that rhythm.  If the current gold market follows those same dance steps, then we should see a nice rise up into a top due in early June, followed by another rise leading to a slightly higher top in late July.

The link is well worth a visit.


  1. It seems to me that the whole world is falling into a deflationary sinkhole. I figure that gold prices could easily be dragged down with that. What am I missing?

  2. How do you combat deflationary sinkholes? Try to create inflation via printing money and debasing your currency. Japan Economic Theory Post 1990.

  3. Steven:

    So our electronic and paper digits will increase in value?

    Or will debt be replaced with more debt, of different flavours?

    If you owned gold, in significant amounts, and the paper price went down, would you sell it at the lower paper price in exchange for...paper?

    The paper price of gold can go to $1 for all I care. You won't see a stampede out of physical in exchange for paper - all you'll see is no physical available at the paper price.

  4. Different topic, but I've figured out what the family payments are from the budget.

    - a stimulus payment (as it's lump sum requiring no proof of educational spending), and
    - aimed at families, to buy two votes for the price of one (as parents would typically vote the same)

    So stimulus is back, and meanwhile the govt has $246B in bonds outstanding, and wants to increase the debt limit to $300B.

    We're doing well...

  5. @Jesse I understand that govts can print money but will they do it faster than credit contracts? I'm pretty sure I heard that prices are (still) falling in Japan.

    @Pete if I'd bought gold a long time ago then I'm not sure that I'd be selling (it'd be a trade not an investment)

    @Pete on the other topic, I think you're spot on. This govt are trying cash handouts again ... but nothings wrong really ... everything's fine ... mining boom continues ... plenty of projects in the pipeline ... nothing to see here :)

  6. Steve, Japan isn't a reserve currency. The USD sure is boyo and they will have to print. I agree it will be a goatfuck in the end but Bernanke will try.