Six Years Since Gold Hit Its All Time High. What Next?

February 6, 2018 | By | Reply More

On the twenty fifth of July, 2011 gold hit its all time high of $1837.00 an oz.

Since then it has been downhill to the present day with five tops around $1330 – $1350 in the last 5 years. One of these tops occurred on Thursday of last week, to be followed by a drop of $11.00 at Mondays US open.

The question is will history repeat itself?

Will gold revert to its mean of around $1440.00 an oz and linger in the trough for another few months awaiting another $1350ish peak in the midsummer? Therein lies the fascination of being a gold buff.

Bust To Boom To Bust Again

During this five year period, the US economy has transformed itself from bust to abundance, or so we are told. Confidence is at an all time high reflected in the booming stock market and other assets.

This puts gold out of fashion and the expectation that its price will reflect this fact as the money flows into stocks, property and other fashionable assets so golds price should be steadily declining, but since the beginning of the year it has basically been on a plateau.

Gold Awaits The Pin Prick

But a close analysis of the statistics supporting this premise give many cause for doubt that this ‘boom’ is justified. It is this fear of an imminent bursting of one of the balloons that are powering the optimism that the markets are showing that is steadying the gold price.

Whether it is the prospect of a rise in interest rates that would detrimentally affect the finances of the millions who are over borrowed to an even greater extent than in 2008, worsening relations with North Korea, the awareness of an out of control US national debt, the non farm employment figures (adjusted for average wages!!) or even the dropping value of bitcoin could lead to the pin that pricks the balloon.

Gold and Patience Hand in Hand

Sooner or later this overconfidence in making a buck from the stock market, classic rust bucket cars, inflated property prices etc. will come to end, boom followed by bust is man’s eternal consequence in pursuit of his greed.

What will be left to preserve value will be gold with silver to back it up – that has been proven time and time again throughout history. Our advice, which we are taking ourselves, is to be very, very patient. After all patience is a virtue in an uncertain world.

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