Is this the time to buy Gold?
The end of the 18-year (1982-2000) super-cycle for equities marked the beginning of a 9-year (2002-2011) super-cycle for Gold. During the Gold Bull, the price rose roughly 700% from about $250 to $1800. Since then the price has dropped about 40% off the high. The question people are now asking is this the time to buy Gold?
Despite persuasive arguments published by Gold players like Eric Sprott and John Ing and their network of associates, I don’t think there is enough evidence at this point to be a Gold buyer or a buyer of Goldminer shares beyond minimal positions.
As I see it, the price could easily drop another 10% or more because (i) there is no discernable buyers’ appetite beyond the speculators who follow the popular newsletter writers, and (ii) the US Dollar, while weakened somewhat since March, is still preferred by international traders over currencies like Canadian and Australian Dollars. Those currencies are ones that benefit from market conditions that also favor a higher Gold price. Moreover, the Gold and Silver stock indexes and ETFs, despite a solid +6% move higher today (so far), are still determining long-term cycle lows.
I remain a believer in what I wrote about a year ago, and more recently, that sometime in 4Q2015-1Q2016 the US and European equity markets will finally terminate the current Bull market that began in 3/2009. To recover from the most recent two equity bear markets in 2000-2002 and again in 2007-2008, substantial monetary expansion was required, which pumped up the price of Gold. Following the next capitulation, the central bankers and bankers will make the same intervention.
As I see it, the great majority of us are not privy to how the swaps market today is setting up our future for commodity prices, interest rates and currency exchange rates. That is a big disadvantage to independent traders like us. It is also in the swaps market where regulators have discovered massive fraud and accordingly levied fines of many billions of dollars to the biggest banking firms in the world.
The very private swaps market is many times larger than any market that you and I participate in, and it is managed by bankers and central bankers whose end game is to profit from our misfortune, which they accomplish via their control of all markets, and the fraud that their conflicts of interest facilitate.
Despite the public’s long experience in capital markets and a great amount of smarts, all of us, including the clever and well-informed Eric Sprotts of the world, have now been minimalized as mere trend followers. So far, I see no evidence of a trend reversal. That leaves no course of action to us but to be waiting nervously for the interventionists to drop the next shoe.
Thankfully, Geoff is watching the markets closely. Meanwhile I’m working on the next book and on the PostgreSQL DBMS user interface I need for the quantitative approach to decision making that I use.
Following an immense clean-up of our email lists, the eBooks or invitations are being sent out now.
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