Goldtent TA Paradise

Gold: Real Price of Gold Gold/CRB, Gold to XAU

1. Theseus says:

   January 15, 2016 - 8:28 am at 8:28 am

   I used to follow Bob Hoye regularly – from about 2008/9 when the financial crisis was in full swing and his interpretations appeared to make total sense. His views as a market historian were very credible and his weekly podcasts always interesting. His theory was that after the financial crash of ’08 we were now firmly in a ‘post-bubble contraction’ and that in such periods the best investment would be the miners which would dramatically outperform the main markets (which would fall). This is certainly what happened in the Great Depression. While his thesis appeared to be working out well in the subsequent 2-3 years (up to 2011) we all know that the opposite has been playing out since and miners have been the very worst investment you could have made while the main markets soared. The question is whether the thesis will ultimately prove correct (miners up / market down) but the timing has been way off.

   According to the first chart, miners should be in an epic bull market with all time high valuations since the ‘real price of Gold’ is now at an all time high but of course it hasn’t worked out that way (to say the least).

   For the last few years that I would listen to Bob’s weekly interviews he would generally be saying the same thing – the main markets are over-valued and peaking – but they kept on rising.

   I’d be interested to know his explanation for the massive divergence between the ‘real price of gold’ and the actual price of the miners since it would appear to invalidate his original theory.