Despite all fundamental constraints, historical data, and pure common sense, there are some analysts out there calling an end to the gold bull market. Posted by James Randolph on December 19, 2011
Gold is Still a Bull Market
December 19, 2011 – Despite all fundamental constraints, historical data, and pure common sense, there are some analysts out there calling an end to the gold bull market. True, the gold market has been on an 11-year bull run and has seen a correction in the past month that caused some head-scratching, but there is no room for such a wild conjecture that gold has entered bear territory. To say that the gold market has magically decoupled from every technical framework that has tied it to the markets and is now in a multi-year downward trend amounts to lies, sensationalism, or stupidity.
Remember, it was none other than George Soros who called gold “the ultimate bubble” in very early 2010 when it had just reached a high of $1,225 an ounce. It’s a good thing Soros was buying gold even as he spoke those words. In the last quarter of 2009, Soros Fund Management raised its stake in exchange-traded fund SPDR by 3.7 million shares at a cost of $421 million. It’s possible Mr. Soros simply wasn’t aware what the multi- billion dollar hedge fund in his name was doing, but it’s pretty unlikely. It’s more likely that Soros called gold a bubble and called a top to the market inaccurately for reasons of his own.
There are several well-known commentators who are having their fifteen minutes getting back at gold right now, Nouriel Roubini among them. But, for all his doomsday sophisms including a prediction of $1 trillion in losses in the housing market, Mr. Roubini bought a $5.5 million Manhattan condominium in late 2010, taking out a $2.99 million mortgage. Can that guy really be trusted?
If you look at real data, like unemployment for example, the true numbers indicate the problems that began in 2008, which signaled the parabolic rise of the gold market, have never been adequately addressed or resolved. Right now there are reports that unemployment has declined, but that’s not entirely true. Of course, if you know anyone between the ages of eighteen and twenty-eight, you know there are a lot of unemployed people in this country. The published data, however, omits the discouraged workers who have ceased looking for work, those whose benefits have expired, the implementation of shorter work weeks, pay cuts, and the conversion of full time to part time.
The likelihood of the economy limping its way into recovery and gold entering a bear market is really out of touch with the reality we are facing. We cannot pinpoint the exact turning point for gold as it resumes its upward climb, but we can most surely and definitely state that gold is now and will be in a bull market for the foreseeable future. Any gold you have bought over today’s gold market spot or will buy will most certainly be worth more in the coming months than what you paid for it.
Senior Staff Writer – Certified Gold Exchange