History of Gold Bull and Bear Phases

Are you in the camp of believers who think that Gold prices never fall and just moves in upward direction with very small correction on it's way? Whether your answer is Yes or No, following snapshot is going to stun you for sure. Like equities Gold also encounters heavy correction and periodically gets into bear phases. 

No asset class can move in only one direction which is a wisdom known to all of us but due to short term myopia and memories of recent past most of us now believes that Gold will never correct because in the history of Gold price recording the current bull run has been the longest in terms of time frame and has brought the best returns during the last five decades.

From March 2001 when international gold prices were $258 per ounce Gold prices went up by 608 per cent to $1,826 an ounce in August 2011. On an intra-day basis, gold prices had crossed $1,900 too. However looking at the last five phases of gold price movements since 1971, after every rally, gold prices have seen sharp price corrections, and have declined by 40-50 per cent.

Gold as an asset class has a very basic problem that is does not yield anything which make is very vulnerable to shift in interest from non yielding asset to yield based assets such as equities and real estate. With gold supply now exceeding demand, the fundamentals of the metal is also appearing very weak in near future. 

To know more about gold check out the followoing link: World gold fact and statistics


Amit Agarwal said...

Gold witnessed huge crack of 5% plus on LME on 12th April 2013 and is very near to it's 2 year low. The metal is down around 20% from it's high and could fall another 15 to 20 percent over medium term.

Read the full analysis of Gold Outlook given in the following post:


Amit Agarwal said...

As expected by InvestorZclub, Gold is about to break below $1300 and is now done 30% from it's high making it into bear market. It should take strong support at $1100 which is more or less the cost of production of 1 ounce of gold.

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