Gold – A 40 Year Perspective

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Gary Christenson - Deviant Investor

In broad terms, gold was in a bull market during the late 1960s and 70s, a bear market during the 80s and 90s, and back in a bull market since 2001. The important questions are:

  • Did gold reach a generational peak in 2011 and subsequently turn down for a decade or two?
  • or

  • Did gold reach an intermediate top in 2011 based on QE, dollar weakness, and high demand, correct for 2.5 years, and then begin a rally likely to persist through the end of the decade?

My answer is: Gold peaked in 2011, bottomed in June and December of 2013, and should rally for several, and probably many, years into the future.

Why?

Examine the following graph of weekly gold prices since 1977 and the 144 week simple moving average shown in red. The uptrend since 2001 is clear and pronounced. The correction since 2011 is unmistakable.

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