The Next Great Bull Market in Gold Has Begun
A new, long-term, secular bull market in gold has begun.
This new trend will take gold past $1,400 per ounce by the end of 2018, past $4,000 per ounce by 2020 (if not sooner) and ultimately to $10,000 per ounce or higher by the mid-2020s.
This bull market actually began on Dec. 17, 2015, when the dollar price of gold sank to $1,051 per ounce. This new bull market was two years old last weekend.
That’s OK. Bull markets begin slowly, almost unnoticed in the gloom of the prior bear market. The biggest gains often come after a few years when the crowd catches on and the price action gains momentum.
This new bull market in gold is the real deal and should last until 2028 or beyond.
The moves so far have been relatively small compared with what’s ahead. This is the perfect time to make your allocation to physical gold, gold mining shares and gold royalty companies or “streamers.”
The last secular bull market began on Aug. 25, 1999, when gold bottomed at $252 per ounce. From there, it began a spectacular 12-year run until peaking at just under $1,900 per ounce on Sept. 2, 2011.
The 1999–2011 bull market represented a 655% gain over the starting price, easily outpacing stocks, bonds, emerging markets and other competing asset classes.
September 2011 marked the start of a brutal four-year bear market, with gold finally bottoming at $1,051 per ounce. Unfortunately, that bear market included a lot of head fakes and bear traps along the way.
Gold managed a 13% rally from around $1,580 to $1,780 per ounce in the late summer and early fall of 2012. It also managed another 15% rally from $1,200 to $1,380 per ounce in the first quarter of 2014.
There were other notable rallies along the way, but every one was snuffed out by disinflation, Fed tightening after 2013 or manipulation in the gold futures markets.
No gold investor can forget the “April Massacre” in 2013 when gold was crushed from $1,550 to $1,360 per ounce in two weeks, a 12% rout.
Buying the dips was a consistently losing strategy as gold continued its downward trajectory after every brief rally. The pain continued until December 2015.
Now here’s the good news: The bear market in gold is officially over.
His work is regularly featured in the Financial Times, Evening Standard, New York Times, The Telegraph, and Washington Post, and he is frequently a guest on BBC, RTE Irish National Radio, CNN, NPR, CSPAN, CNBC, Bloomberg, Fox, and The Wall Street Journal. He has contributed as an advisor on capital markets to the U.S. intelligence community, and at the Office of the Secretary of Defense in the Pentagon.
Rickards is the author of The New Case for Gold (April 2016), and three New York Times best sellers, The Death of Money (2014), Currency Wars (2011), The Road to Ruin (2016) from Penguin Random House.
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