Precious metal investments: news, consultancy, trends, reports & more!
HomeMarket WatchHard AssetsInvestor's GuideDownloads
 

The Decade-long Gold Bull Market
and the Economic Crisis




Gold's bull market has lasted for more than a decade, kicking off in the year 2000 and continuing all the way to the peak in September 2011 and crash in 2013.

It was a dramatic price increase from the 250's to the low 1,900's in terms of US dollars before gold oscillated a bit and finally took a correction dip in 2013.

Observe the chart below showing gold's ascent - it did take a more abrupt climb following the ignition of the 2008 crisis.


Gold's price between 1999-2014

Gold started rising in the very early 2000's



Prime Values has predicted gold's crash months before it happened in 2013.
The signs were obvious, gold was overbought and major investment firms made short-sales, which brought the price down in a cascade.


Gold's from mid-2009 to mid-2014

Gold's price from mid-2009 to mid-2014



It was very unusual for a commodity to climb more than a decade (paraphrasing investor and author, Jim Rogers), so in April 2013 it was about the time gold took a dip.

The decade-long bull market was fed by the predictable consequences of the US Federal Reserve's quantitative easing programme (which was obviously weakening the dollar), the hunger for gold ETF's by speculative investors and also the fact that the shiny yellow metal is considered a great hedge against currency devaluation.

We must note that many central banks were accumulating and repatriating physical gold during this period.
This too has boosted gold's price.

This more than a decade-long bull market proved to be successful for those who bought low and sold high.
Naturally, those who came in late were left disappointed as gold took a dive in 2013 and, the negative feelings propagated further - breaking the belief that gold can be a hedge against currency devaluation.

Still, there are strong reasons to believe in gold investments, even following this crash.

Gold's price was brought down by major short-selling activity. Someone somewhere (perhaps more parties involved) needed to make a big profit by selling gold contracts (not physical gold).
The massive speculative (profit-generating) sell-offs has weakened confidence of investors. Panic, lack of confidence is still keeping gold at a rather low mid-1,250's level at the time of this article's writing.

We are still living the the new gold rush, despite the price correction.

The global economic crisis still isn't over. Although growth is picking up, it's not so much the West whose economic engines are igniting - most of the growth originates from various other parts of the World.

Gold has fulfilled its role as a hedge during recent crises in the Ukraine, Venezuela, Argentina, Japan - where currency value dropped and those who had gold savings were able to make profits, even.

It remains to be seen where the current global economic crisis will evolve. Will the dollar be negatively affected? Will oil's price increase? And so on and so forth, we can ask ourselves dozens of other questions...

Some argue whether the bull market for gold has ended or, whether this was only the first phase and the bullish forces will kick-off following this correction.





comments powered by Disqus

 
Prime Values on FacebookPrime Values on Twitter

about us    terms of use    privacy policy    disclaimer    partners    advertising    contact us