Given gold’s recent price action, have we seen a secular peak for the metal? While I was not quite sure early in 2013, I don’t think there is any question in my mind today. The high seen in 2011 can be equated to the 1980 and 1947 highs, tops seen in secular commodity bull markets.
I wasn’t very happy with my precious metal analysis in February so I bought some long term data for gold and ran this analysis based on data back to the 1960s. The approximate 8 year peaks in gold are very distinct when viewed in the context of the 16 year FLD (blue line). The peaks seen since the 1980 high were notably marked by peaks in the 16 year FLD. These peaks also mirror the 8 and 16 year cycle lows if one were looking at a trough analysis for gold.
I won’t go out on a limb with a shorter term forecast for gold. However, I would say that bear market strategies are appropriate for the metal into the summer.
N.B. Moved post to blog area. No real change on the long view. A 4 year low is due for the metals sometime this summer.