Gold Prices & a Sense of History

COMPLETING THE GOLD PRICE PICTURE

To truly participate in a journey, one needs a sense of where one has been.

Comparison is one way Human Beings rate success or new experiences).

This sense of knowing where we’ve come from goes a long way towards understanding where we are today.

In the markets we use charts to show us where (and how) a commodity or stock has traded in the past, and, as we’ve been discussing GOLD in our last few articles, let’s get a real sense of where GOLD has been so we can hopefully understand better where we are today relative to GOLD’s cycles of booms and busts.

We need to look far enough back to see the last boom in GOLD. The chart below will take us there.

GOLD Price History

GOLD Price History

There’s a lot more information in this chart than first impressions may discern.

Look to the last Bubble in GOLD back in 1980.

Do you think the psychology of the public or of the Gold bugs near the beginning of 1980 was such that they thought that prices could go anywhere but UP?

Using a similar mental exercise on our parts; do you think after the High and the first fast drop and during the following retracement back upwards that anyone thought this market was going to go down for another 19-years?

I can tell you that the vast majority did not.

I was there then and I remember it quite clearly in this regard.

I can tell you that the die-hard Bulls held on all the way down without ever changing their minds about the renewed bull market to come and the brokers who promoted the heck out of Gold never sounded the exit alarm at any early or wealth-protecting point on the way down.

It was unthinkable to them that GOLD could go down.

Yes, like today, there was fear about the Economy and inflation and people assumed these economic problems couldn’t be fixed and that GOLD was the port of last resort for preserving one’s wealth.

This song has played before my friends and no one in the majority (then or now!) was correct on the Economy’s future.

GOLD declined back in 1980 in spite of inflation!

GOLD played no part in the cure to the Economy back in the 1980’s and will not participate in curing the financial crisis in our day either.

Why?

Because GOLD is a commodity, not money.

We’re not on the Gold standard and today, many instruments act as money which are far more liquid and useful in day-to-day transactions.

We need to absorb these lessons of History in the proper light, so, let’s take a look at where today’s Gold trend has come from and where it has brought us to today.

THIS IS WHERE OUR PRESENT GOLD TREND CAME FROM

The Real History of  Where GOLD has been

The Real History of Where GOLD has been

No patterns are perfectly repeated in markets, or at least only rarely, however the trends and probabilities strongly repeat themselves throughout History.

I won’t elaborate on what is clearly shown on the above chart. I think there’s plenty there to consider and to include in a rational judgment of where we are in the present day GOLD price movement.

I’d encourage one to step away from the hype and consider the facts of History to come to your own conclusions relative to one’s investing or long-term interests.

What are the odds?

Do you think the odds are on the side of those willing to buck Historical cycles in favor of the crowd’s present mania? How often has that worked?

Over the many decades, I’ve come to see that the odds always favor those who have a sense of long-term  History as well as a sense of adventure and daring.

May looking backwards in History help to project you forwards to a successful trading adventure. George

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P.S. – I‘d encourage those of you who are serious about the markets to take a closer look at the EXCALIBUR METHOD if you wish to get a far better sense of timing the ends of old trends and the beginnings of new trends. This is the only place where this unique, proprietary process is available (subject to a strict non-disclosure agreement to protect all participants).