Bearish or Bullish for Bullion; Place Your Bets!
Avi Gilburt is the author of elliottwavetrader.net and has been following Gold for quite some time. In his most recent article “” he makes some bold predictions about where Gold is going including a flashback to the past when he accurately predicted the ensuing decline in 2011.
“Suppose someone approached you in the year 2000, when the price of gold was around $250 an ounce and suggested that it would be worth almost eight times its current value within the next decade. I am sure most people would have thought that person to be less than credible making such an outrageous market call. Think about it. An asset being expected to multiply by eightfold within a decade? But as we all know now, gold went from $250 an ounce to just over $1,900 an ounce in just that amount of time.
What if I was to tell you that gold could make another such run over the next decade plus? Does it seem that outrageous now? Well, I think the math shows it can and will, with the price of gold futures surpassing $25,000, and more specifically for this column, the price on the Gold Bug Index eclipsing 15,000. But let’s take a look back before we go forward.
This seems insane to most investors who consider Gold to be a good source of storing value instead of as an investment focused on rapid growth. Historically it has been more of a strong currency and a solid alternative to the unpredictable and highly volatile fiat currencies. To Gilburt’s credit, he did foresee the steep drop in price when everyone else was a bull for bullion.
It’s the middle of 2011. Gold was rising parabolically — some days even advancing by $50 per day — and heading over $1,900. Breaking the $2000 mark to most was a sure thing.
Think if someone walked up to you then and stated that the price of gold would be cut in half within four years. It would be an outrageous market call. In many ways, it would be no different than the person suggesting that gold would go from $250-$1900 within a little over a decade.
Well, in August 2011, I was that person. In fact, , I warned investors:
“Since we are most probably in the final stages of this parabolic fifth wave ‘blow-off-top,’ I would seriously consider anything approaching the $1,915 level to be a potential target for a top at this time.”
At the time, everyone was so intoxicated with expectations of eclipsing the $2,000 mark that they failed to see the impending top. As we now know, gold topped in September of 2011, at just under $1,921, which was within $6 dollars of my target. We then began this multi-year correction within which we now find ourselves.
Many are probably wondering how I came up with such an accurate target for a top to a market that was rising parabolically. My answer is that the topping target was calculated using a 200-year Elliott Wave and Fibonacci mathematics study. To make this market call even more prescient, before we even topped, I identified the downside targets for gold within the correction I expected. I was looking for gold to drop from the 1900 region, down to a minimum of $1,400 an ounce, but, more likely, the $700-$1000 region.”
Read his whole article: .
Truth be told, Gold is comparable to a crippled yet relentless currency hobbling along behind inflation. Depending on the speed and upward mobility of the markets it sometimes gets left in the dust until the markets slow enough for the hobbling precious metal to catch up. Certainly it does keep its value over time but it never rushes ahead of inflation nor does it double or triple its value without first losing the equivalent. Only time will tell if Gilburt can conjur up the path that gold is sure to travel. In the mean time, however, I’m not buying it.