| Chart of the month .. November 2013
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01 Jan 13 |
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They say history does not repeat, but it rhymes sometimes. If, for the
purpose of this little column, we assumed that gold price history rhymes
from time to time, we would possibly first note, that ever since gold
assumed its multi-decade low in 1999 (the infamous Brown Bottom) and then,
a year or two later, started its rise in a now more than a decade long bull
market, there have been five prominent price spikes: on 2001-05-21 with
$288.35, on 2003-02-05 with $385.00, on 2006-05-12 with $725.75, on
2008-03-17 with $1,023.50, and on 2011-09-05 with $1,896.50 (prices are LBM
AM Fixings). If we number these price spikes from 1 to 5, we can see that 1
and 2, respectively 3 and 4, are closer to each other. Expressed
differently, they seem to come in pairs. Further more, the rise within the
pairs (1 to 2 and 3 to 4) was 34% and 41%, while from one pair to the next
(2 to 3 and 4 to 5), if we assume that the most recent fifth spike belongs
to a pair as well, it was 89% and 85%. If we take the middle of these
respective moves, and also extrapolate the times between them into the
future, we could try and guess what a sixth (second spike in a third pair)
and a seventh price spike (first spike in a fourth pair) could look like
(see also chart below). Our guess would be 2013-06-24 with $2,603.37 (spike
6) and 2015-01-29 with $4,865.73 (spike 7). So, should you be surprised if
you would see a $1,000 move in gold in the first half of 2013? We think you
shouldn’t.
Best wishes for 2013 from the Approximity Gold Team!
More at gold.approximity.com/gold_charts.html
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