Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Secular Bull Market Mania Phase 2011-2013

Commodities / Gold and Silver 2011 May 23, 2011 - 08:01 AM GMT

By: John_Hampson

Commodities

Best Financial Markets Analysis ArticleI propose that the third and final phase of gold's secular bull since 2000 has begun in early 2011 and will end in 2013. I suggest that this third phase, a popular and parabolic mania, was announced by both silver's mega move January to April 2011 and the US Dollar's break beneath long term rising support, and will proceed to conclusion in a similar way to the last secular gold bull of the 1970s.



Source: Zealllc


Source: PFS Group

Gold will finally enter genuine bubble territory and conclude in a manner similar to previous asset manias.


For a deeper understanding of forecasting the gold secular bull to end around 2013, please read my previous articles:

End Of The Secular Commodities Bull (March 7th)
Solar Activity And The Financial Markets, Parts I and II (March 30th, April 4th)

--------------------------------------------------------------------------------

Let's now look near term.

Currently, gold open interest is at a level on par with late January 2011 and late July 2010, the last two significant lows for gold.


Source: Biiwii

And gold has just broken out from its recent consolidation range.

The gold Hulbert sentiment indicator fell to just 7% in early May, a historic contrarian buy range, and excessively bullish sentiment has now truly washed out against silver. However, I believe silver needs more time to consolidate following its parabolic blow-off, so expect gold to outperform for a period.


Source: Sentimentrader.com

The PFS Group long term gold indicator is bullish as of early 2011.


Underlying Source: PFS Group

I previously noted that the 200EMA has supported the secular gold bull to date (see first chart above) and is currently at $1400, which I believe would offer ultimate support for any consolidation move down. However, I believe the COT and sentiment readings together with the recent range break out for gold mean that we may be looking at a new leg up in gold (even if stocks and commodities generally take a mid-year breather), which means the recent bounce at $1462 would be the low.

This idea may also gain strength should the US Dollar stall soon at the backtest of its long term rising support break - around 77.5 on the USD index. Such a stalling may occur if the European debt issues are once again kicked further down the road whilst Euroland interest rate rises and increasing rate differential over the US return to the fore. But as shown in the third chart above, US Dollar weakness is not necessary for gold to advance, whilst real interest rates remain negative.

If I am right that we have entered the final phase of the gold secular bull market then the dynamic of this phase means that there will be little opportunity to time the market. What appears to be potential headwinds for commodities currently (potential economic slowdown and debt issues re-emerging) may well be spun into tailwinds for gold (low rates and stimulus to extend and gold perceived as a safehaven).

The biggest gains of the secular bull will be made in this final phase 3. Summarising the above, I believe the question needs to be asked now, not later: do I have enough money in gold?

John Hampson

www.amalgamator.co.uk

John Hampson, UK / Self-taught full-time trading at the global macro level / Future Studies
www.amalgamator.co.uk / Forecasting By Amalgamation.

© 2011 Copyright John Hampson - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in