GOLD NEARING $4000

Ooooh, ooooh, I found gold in a new area. I'm gonna keep it to myself and only tell it to the world on the internet.

 

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Okay, what's the indication from today's signal - a drop of about $230/oz, so far?

 

Nasty corrections are the hallmark of a bull market. It's been straight up for weeks (months ?) so a nasty correction and heightened volatility are NOT surprising.

PMs should be more volatile than stocks or bonds. The market reminded the folks saying "put all your $$$ into gold and silver" of that today.

 

I've seen a couple of articles claiming that increasing volatility signals the end of a bull market. I take it you disagree?

 

All of those "soothsayers" are the same, whether PM or equities. Take them all with a grain of salt. Remember, nobody remembers when those clowns are wrong, only when one's magic eight ball happens to get lucky. The financial news section of the internet cracks me up. These bozos wait to see what is happening in the market and then explain to you why it happened. They NEVER get anything right in advance.

 

Sometimes yes, sometimes no. They rarely telegraph the end of a bull market.

But there are wicked fake-outs on the way to an ultimate high. Today the moves in gold and silver are all over the headlines, even on CNBC.

The underlying fundamentals for gold are still in place. It's been a steady, slow move up for gold....it never corrected and let you get in. Well, today it is.

I think we will hit new highs in weeks. And $5,000 is still possible in early-2026.

 

Overall, I would agree. But there are some folks who get it right more than wrong and they are accountable. In the 1980's, during the newsletter boom, some of those folks were uncannily accurate. For years. Until they weren't.

I still see the supply and demand situation for gold as being positive so no need to reverse my bullishness. Expect gold to keep rising right into FUN and the Chinese New Year, when I am most likely to buy a gold coin.

As soon as I have bought, the bottom will fall out.

 

And, of course, you can't tell which ones are uncannily accurate until you can use hindsight. Fortunately, at that point, the ones who guessed right are more than happy to tell you aaaaallll about it.

 

I'm trying to remember the last time I saw a 5% daily dip in gold. Unfortunately, I don't know how to get to an actual dataset that would let me check. (And silver's down 7%, but I'm pretty sure I've seen that happen multiple times.)

 

https://www.macrotrends.net/datasets/1333/historical-gold-prices-100-year-chart

 

My real question is... are gold and silver in a bull market, or are they in a bubble? Because the last week or so has felt like peak bubble mentality... everybody is buying, London is out of physical silver, price has gone straight up...

Is this a small correction and profit taking in a larger bull market, or are we nearing a bubble pop?

 

That was me when I played with stocks.

 

Yeah, that's one of my go-tos, but it only has daily data for the last 10 years, monthly before that.

 

I see. I didn't actually look at the data, just saw that it was on offer.

 

I recall when I thought Bitcoin was in a bubble so I sold at $1900ish.
I think I was a little off ....

But as long as central banks are buying above supply it should keep going.
Now, how to figure out when they stop buying.

 

There was a guy named Al Frank, ran The Prudent Speculator. A teacher who took to stocks during the bull market and had a fantastic performance picking value and growth stocks. Down-to-Earth guy....he got killed by margin (he believe in it like God) during the 1987 Crash.

Anyway, I met him at a conference in early-1989 and he was very apologetic to his followers for being a bit reckless.

Stan Weinstein, Bob Prechter, Elaine Garzarelli, Louis Rukeyser -- just like they were on TV.

Ah, the Good Old Days !!

 

CNBC says since 2012 (percentage basis).

I believe the absolute drop is the bigggest, I think we did have $200 drops intra-day at lower gold prices but it didn't finish the trading day down that much.

 

I think the former.

COULD it be the top is in ? Sure, I'm smart enough to know I'm not smart enough to predict this perfectly. But if CBs are still buying and institutions are still buying and if gold has weathered $2 trillion going into crypto (even if 5-10% only went to gold, that's $100-$200 billion !! )...we should go higher, but not at the rate of the last 3-4 months.

As I posted elswhere, gold is up just under 4x in 10 years or 3x in 6 years. It was up 6x in 9 years (2002-11) and 20x in 9 years (1971-80). THOSE are bubbles !!

So gold is up 15% CAGR or 20% CAGR in the recent runup, depending on when you start. It was up 22% CAGR and 42% in the other up-moves (even if you use $600 as the 1979 peak it's still 37% CAGR).

A very nice move....maybe even a top (I doubt it). But no way a "bubble" compared to previous asset bubbles or even gold "bubble-like" moves with much higher CAGRs over similar/longer time periods.

 

The dollar is stronger, profit taking on the strong and fast run up, trade war with China is better and a few other things that are bad for precious metals happened at the same time.