How To know If The Gold Bull Market Has Ended

In this article, author Peter de Graaf provides a “checklist” with 11 signs that will reveal the end of the gold bull market. He explains based on several charts that we are not even close to that point. (chart courtesy Stockcharts.com).

  • Central banks will have stopped their money printing madness.
  • The US Federal Government will have balanced its budget.
  • China will have invested 20% of its trading surplus in gold.
  • The US CPI will have peaked at a rate above 10%.
  • The public in the USA, Canada, Australia and Europe will have bought gold with their savings, including a goodly portion of their tax free savings.
  • The public in India and China will have turned from buyers to sellers.
  • Sellers of gold will have a currency available to them that offers stability.
  • Financial headlines will have featured stories of gold mining stocks that rose from pennies to a hundred dollars.  (In 1975 Lion Mines could be purchased at 0.07c a share – in 1980 the share price was $380!  Wharf Resources traded at 0.40c in 1975 – by 1980 the price had risen to $560).
  • TV screens will have featured lineups of buyers at coin shops.
  • Crude oil will have reached a record high price.
  • Silver will have outperformed gold on a percentage basis.

 

gold_price_chart_january_december_2013

Featured is the daily bar chart for gold bullion expressed in US dollars.  Price is breaking out from beneath five weeks of resistance.  The pattern is a bullish falling wedge.  A closing price above the blue arrow will confirm a major bottom at the $1200 level.  A subsequent breakout at the green arrow turns the trend bullish.  The supporting indicators are turning positive.  Our proprietary Gold Direction Indicator bottomed at 19% on December 3rd and closed at 51% on December 10th.

gold_price_chart_2001_till_2013

Here is a longer-term look at the current gold bull market, with a log scale chart.  Notice the rising channel.  The supporting indicators have turned positive, including the important Accumulation/Distribution line.

“The History of the US FED:

  1.   Create a problem.
  2.   Solve the problem.
  3.   Get praise for solving the problem.
  4.   Make sure the solution leads to the next problem
  5.  Back to #1.”  …..Dr. Gary North.

gold_dow_jones_ratio_2013

Featured is the index that compares gold bullion to the DOW Jones Industrials.  The index is trying to bottom, and a closing price above the blue arrow will be the first sign of confirmation.  A breakout at the green arrow will convince a lot of investors to move funds from the stock market into gold.  The supporting indicators are positive.

gold_US_dollar_ratio_2013

Featured is the daily bar chart for gold expressed in foreign currencies.  Price is breaking out here as well, and volume was very heavy (green arrow).  The supporting indicators have been showing bullish divergence and now they are turning positive.  A breakout at the blue arrow turns the trend bullish.

gold_commitment_of_traders_2012_till_2013

This chart courtesy Cotpricecharts.com shows the ‘net short’ position of commercial gold traders fell for the fifth consecutive week, to 21,000 compared to 28,000 the week before.  As a percentage of open interest the number is a bullish 6%.  This compares to 5.5% on July 2nd.  That was just before gold rose from $118t6 to $1435.

GDX_gold_miners_chart_april_december_2013

Featured is GDX, the gold and silver producers ETF.  Price is breaking out from a falling wedge pattern (green box).  The supporting indicators have been showing bullish divergence and are now turning positive.  The increase in volume is indicative of strong hands buying from weak hands.  A breakout at the blue arrow will confirm the bottom, while a breakout at the green arrow turns the trend bullish.

gold_imports_china_hongkong_2001_till_2013

This chart courtesy Goldchartsrus.com shows the massive amount of gold that is moving into China via Hong Kong. As long as this trend continues, the fundamentals for gold are positive, and the bull market lives on.

silver_price_chart_June_december_2013

Featured is the daily bar chart for silver.  Price broke out from a bullish falling wedge formation on December 9th, and confirmed the breakout the next day.  The supporting indicators are turning positive with lots of room to rise higher.  A breakout at the blue arrow will confirm a large ABC bottom, and a breakout at the green arrow turns the trend bullish.

US Geological Society 2010 report:  “Silver will be the first element in the periodic table that would become extinct.”

silver_commitment_of_traders_2012_till_2013

This chart courtesy Cotpricecharts.com shows the ‘net short’ position of commercial silver traders slipped to 12,000, compared to 16,000 the week before.  As a percentage of open interest the number is a bullish 9%.

 

Peter Degraaf is an online stocks and bullion investor. He has over 50 years of investing experience.  He publishes a daily report for his many subscribers.  To receive a sample copy of a report, you are advised to send him an Email via www.pdegraaf.com

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