Chart 1: Gold’s annualised performance worst since 1982 bear market!
Source: Short Side of Long
After looking into Silver’s performance last week, I’ve been asked to do the same with Gold. Today’s chart focuses on Gold’s annualised (12 month rolling) performance. As we can see in the chart above, relative to the 1970s bull market, recent decade long gains have not occurred too fast, in a bubble type manner (think Silver late 70s, Nikkei late 80s, Nasdaq late 90s).
The chart also shows that Gold did not rise with parabolic (vertical) velocity usually linked to manias and public frenzy buying like we saw in 1970s. Therefore, if I am correct in predicting the continuation of the Gold’s bull market towards its climax late in the decade, then we can assume the current under-performance (worst since 1982) is a great buying opportunity.
As stated many times on this blog (despite various rallies), I remain of an opinion that Gold will break below $1190, and closer towards testing $1000 per ounce, before the final low is in. Nevertheless, I continue to add towards my PMs positions on every major sell off.