7 facts proving we are in a long term powerful uptrend in Gold and Silver
“The trend is your friend.” Do you know an easier way to become more wealthy then just investing in a trend? It’s easy and you decrease risks. Nice, isn’t it ?
Below you can find several charts about 7 topics. They all prove that we are in a powerful long term bull market in gold and silver; it’s so powerful that you can easily call it a wealth cycle.
If there is one thing we can advice, it would be to have a critical look at these charts. Can you deny these facts? If not, you will start seeing what is really going on in this world, on a global scale; it will change your world view entirely. For those who are familiar with these trends, it’s just another confirmation of what you already know.
1. The price of gold and the price of silver are in a perfect uptrend for the past 10 years (not at all parabolic yet) , moving in a range within an upper and lower band. Do you know a more perfect bull market than this one ? (chart courtesy: Goldchartsrus.com)
Perhaps you would think we are at the top and the gold price or silver price cannot go higher. While it’s true that we are close to historical highs in the price of gold in NOMINAL terms and retraced a bit from the highs in the price of silver, we are nowhere near a top when look at the gold price adjusted before inflation. (chart courtesy: Erste Group)
2. There is a positive, almost one-on-one correlation between the debt ceiling in the US (which keeps on increasing) and the price of gold in US dollars. (chart courtesy: Goldchartsrus.com)
3. As the price of gold in US dollars increases, all currencies against each other keep on decreasing. Governments have a benefit to debase their currencies, being to have relatively less burden of their debts. This results in the price of gold and the price of silver in all currencies to increase. (chart courtesy: Board of Governors of the Fed and Global Gold)
Now the picture becomes worse when you look at currencies priced in gold. Let’s take a 10-year chart of major currencies compared to the price of gold. (chart courtesy: Bullion Management Group)
By consequence, products and services expressed in local currencies become more expensive. But when you price the same products and services in gold instead, they become cheaper. (chart courtesy: PricedInGold)
4. One strong trend is the increase in demand for physical gold from Central Banks all over the world. Recently, they became even net buyers of gold. (chart courtesy: Chris Martenson and Goldchartsrus)
5. While all the above trends are taking place, the supply of gold and silver are not increasing at the same pace as demand. There was a time when gold was abundantly available, just a couple of meters below the surface. That’s history; nowadays it’s very hard for gold and silver discoveries to take place. What do you think what happens with prices when there is a higher demand for a good with a stable or decreasing supply (in relative terms, compared to demand increase) ? (chart courtesy: Casey Research)
6. Do you know how much is invested in gold & silver? The answer is less than 1% of all invested assets all over the world. That’s really nothing. Can you imagine what will happen with the gold price or silver price if a small percentage of the investment world is moved to gold or silver ? (chart courtesy: Sprott Asset Management)
7. The gold bull market is currently in stage 2 of the typical 3 stages. The third phase typically is a mania; we know for sure that we aren’t there yet … so now is the time to position yourself by accumulating gold and silver. (chart courtesy: Contrarian Investor)
Here is another way to look at it: compare this gold bull market to other long term bull markets during the past 40 years. You can compare it with the dotcom bubble or the gold bull market of 1970 – 1980. (chart courtesy: Agora Financial)
Author: Desk of GoldSilverWorlds.com
Date: February 2012
Additional recommended readings: 7 benefits of owning gold and silver and 7 tips to increase your wealth with gold and silver
Beginners’ Guide – All Articles
INTRODUCTION TO THE WORLDS OF GOLD & SILVER
7 TIPS TO INCREASE YOUR WEALTH WITH GOLD & SILVER
IS NOW THE TIME TO BE BUYING GOLD & SILVER?
THE BEST GOLD & SILVER INFOGRAPHICS