Goldtent TA Paradise

Rhyming With 2002 ?

1. KenS says:

   July 7, 2019 - 5:35 pm at 5:35 pm

   The big difference, in my opinion, and it is a big difference, is that gold was unjustly valued in the early 2000’s. Why do I say that? An old adage – that has stood the test of time – states that an ounce of gold buys a fine man’s suit. In the year 2000, a fine man’s suit cost around $1,000 USD. Gold at that time was selling for about 1/4 of that. That is why we had the big rally. Gold was playing catch-up. Gold now is selling for around $1,400 and ounce and what is a fine man’s suit cost?

   https://us.burberry.com/classic-fit-check-wool-three-piece-suit-p80052441

   My point is, gold at this point is fairly valued. Don’t expect a new bull market in gold.

2. Afasilver says:

   July 7, 2019 - 6:22 pm at 6:22 pm

   “Don’t expect a new bull market in gold” … it’s already a bull market, since 2016? Phase I complete (upon breakout — check), Phase II just started with many still on the sidelines not believing it, especially mainstream financial outlets.

   In our example, it’s interesting the MSRP is twice the value they’re selling it at in your example … what about these examples: http://nextluxury.com/mens-style-and-fashion/top-best-suit-brands-for-men/

   Many of these examples are 2x, 3x, even 5x your suit costs. Unless we have a steady measurement of what a fine suit brand is that it tightly correlated to the price of gold over time then your argument does not stand by itself very well.

   • KenS says:

     July 7, 2019 - 8:12 pm at 8:12 pm

     Afasilver – I’m an Elliott wave guy so I look at things through those lenses. In Elliott wave terminology, there are corrective and impulsive waves. 2001-2004 was impulsive. Straight advance up from the bottom, very few overlapping waves (only minor waves). 2016-2019 is corrective, the main waves overlap themselves. I don’t consider us in a bull market – to me this is a correction in an extended trend sideways. 2001-2004 80% gain. 2016-2019 35% gain.

     I took the suit suggestion from an article from Business Wire (a Berkshire Hathaway Co.).
     https://www.businesswire.com/news/home/20110819005774/en/History-Shows-Price-Ounce-Gold-Equals-Price

     Regardless, I think you will agree gold was very underpriced in 2001. By the same measure, it is not now.

     • Afasilver says:

       July 7, 2019 - 10:25 pm at 10:25 pm

       I disagree … I think gold (and especially silver) are very undervalued currently as measured by the amount of base money supply and credit in existence … of course the fast growing negative yielding debt doesn’t hurt either, something that is completely different from the early 2000s.

       Regardless of what the FED does next, remain neutral, hike, cut, it all bodes well for the metals. Cut … real rates go down, remain neutral … the general markets will throw a tantrum, so cuts will be required … hike, this means inflation is running hotter than expected. From my perspective the FED is finally losing after 10 years of fraud, waste, and abuse of the U.S. (and global) financial markets. If people haven’t caught on yet, their third and unpublished mandate is to hold up general markets at all costs … cuts are coming.

       I find it interesting watching EW guys … they all have different counts, half bullish, half bearish … Avi Gilburt, Sid Nelson, and others have some very powerful set ups both primary and alternate counts right now for higher gold/silver/miner prices. At least Sid also incorporates cycle work with his counts, which from what I can tell, few other EW guys take the time to do. I think that is why Northstar and others using cycles have been accurate on the big movements recently.

       Regardless, it will be interesting to see what unfolds the rest of the year. There is little doubt the U.S. economy is weak, Trumps ongoing lies about how strong it is are just that, lies. If the Democrats take over, all hell will break loose in markets as socialistic ideas/programs will continue to cut off any remaining freedom and profits markets have.

     • Fullgoldcrown says:

       July 7, 2019 - 11:08 pm at 11:08 pm

       Ken

       IF Gold can be undervalued wrt a man’s suit it can also become “overvalued” vs a man’s suit.

       IF it was 1/4 the value in year 2000 why could it not be 4 X the value in 2020 ?

       and PS….I just bought a fine suit for $ 500 Canadian.

       One mans fine suit is another mans rag

       🙂

       • KenS says:

         July 8, 2019 - 12:08 am at 12:08 am

         Agreed, but if it does become overvalued, it will snap back to fair value as it did before.

         “Fine” suits cost more than $500 fully 🙂

     • Northstar says:

       July 8, 2019 - 3:11 am at 3:11 am

       Hi Ken. Where do you get 80% from? Gold started 2001 around $270 and by the end of my chart in mid-2004 it was around $380.

       • KenS says:

         July 8, 2019 - 7:49 am at 7:49 am

         Hi Northstar – the high for 2004 was $458.20 and the low in 2001 was $255.80, at least according to the price labels on StockCharts. That works out to 79.1%.

3. DaveintheUK says:

   July 8, 2019 - 7:13 am at 7:13 am

   I like the comparison even if it doesn’t work out.

   I always wondered if the 2016 upmove in gold was akin to the 1999 spike on the central bank gold agreement.

   How about superimposing the US dollar index on the chart too?

   Both had topping pattern in the US dollar index around that time (1999-2002 and 2015-2019(?)) and new, later tops in the dollar did not come with new lows in gold.