As of the 8th of July of the current year, gold had increased by 31 percent from its last year’s all time low, while silver had increased by 50 percent. During that same period of the year, the S&P 500 Index or SPX is at +0.24 percent, according to World Finance News.
It is indeed a sorry half a decade for gold and for silver. At least that is what John LaForge, the head of the strategy on real asset at Institute of Wells Fargo Investment. He believes that we are truly in the beginnings of a lengthy routinary cycle for gold and silver and even other commodities. He said that it is really the case. We are at the point of looking at a forty dollar increase as a miraculous development, in terms of a short run fight in a very lengthy association.
LaForge, who in the past worked at an analytical firm in a research institute, has encountered markets for commodities tracing back to year 1800. His resolution: People have to move in huge, multiyear enthusiastic and optimistic super cycles. There are six similar situations in the past two hundred and sixteen years. Commodities markets like gold and silver have performed an average of 16 years in total duration, and the bears lasted an average of an estimated 20 years.
Why is there a difference? It is due to the fact that it takes longer to remove the excesses that markets create. During the said cycles, commodities such as gold and silver and oil and copper and food are often moving together like family. Can you remember the famous line from Anna Karenina by the famous author Tolstoy? All families which are happy are all the same but those families who are unhappy are uniquely unhappy.
In short, that is a metaphor on how commodities markets operate today. During the active phase that began in 2000, commodities all moved around in a never ending cycle; while at present, in spite of the much modern technological advances, each has its own way of operating: on its downward path.
According to World Finance, the present bearish commodities cycle started in 2011 with some precious metals, and then affected food last 2012 and finally oil years ago last 2014. This shocking pattern of dropping commodity prices is considered typical at the start of the bear cycle.
So, for a moment, gold touched $1,900, just an ounce in August 2011. Meanwhile, silver topped just below $50, just an ounce on the 29th of April 2011 and when this specific column targeted its peak to the very day in this piece called the silver fever really is almost about to destroy and destroy very badly.
Ever since, gold fell to an all time low of $1,050, just an ounce while silver staggered and fell to somewhere lower than $14 in December of last year. That indicated a forty five percent drop for the commodity gold and a seventy two percent drop for the commodity silver from their pedestals. This is a usual bear market drop in both metals. He thinks that those are maybe the lows, though others would have said that gold would drop out at an amount of $800 or lower.
Unluckily, LaForge is expecting that the present fight to lobby would be soon and both silver and gold would retest those lows last December, before eventually settling into an extended trading range. The great news, he informed me, is the fact that the worst of the commodity markets is occurring in the first consecutive years, and in which the case of silver and gold ends this current year. How about the not-so-good news? Silver and gold have an additional ten to fifteen years in the investment limbo. Tough luck with that.
But I can decipher the figurative gold insects already and I hardly can wait to know what you think of this. Your comments have sacrificed the hyperinflation, a phenomenon that is almost never given credit to. This provoked Peter Schiff to guess that gold would reach five thousand dollars. I call it one of the worst investment advices in a hundred years. There are five of them. And now they claim that gold, as a commodity, is insurance against failures and oversights of the central bank.
And, of course, according to Fox News Finance, I know about the fact that George Soros bought gold, but as what Shawn Langlois of MarketWatch stated obviously, following the man’s moves has not really given investors an advantage lately.