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Therefore, we compared the gold price Wednesday with the price movement of early 2006 to early 2008 in the chart below: We all know what happened with gold in 2008. It dropped from as high as $1033 to as low as $681, as all assets were liquidated in ...
We have written many articles over the past couple of months whereby we compared historical price movements with current developments.
To make the comparisons easier, I developed an indicator for the Prorealtime Charting software, which allows me to “go back in time”. The first article showed us that it’s possible that gold could explode towards $5,000 over the next couple of months.
“Possible is everything”, but what could cause gold to explode? Think about a total loss of confidence in currencies, and then we mean especially the US dollar.
As the second article showed us, the US dollar is headed for a crash against the JPY. We have already seen part of that crash, but then suddenly the Bank of Japan intervened and the price shot up. However, interventions don’t work (except for the very short term) in our opinion, and right now, the USD/JPY is already back around its lows, despite the interventions.
However, when you cross the street, you don’t just look at one side if a big truck is coming.. The same counts for investing. One should always consider different views. Therefore, we compared the gold price Wednesday with the price movement of early 2006 to early 2008 in the chart below:
We all know what happened with gold in 2008. It dropped from as high as $1,033 to as low as $681, as all assets were liquidated in order to obtain cash. We were experiencing a really big credit crunch.
As gold and stocks sold off in 2008, gold stocks were hit even harder than gold. If the comparison of gold now vs. 2008 would hold, then what should we expect from gold stocks?
One last thought: Why is Mr. Paulson’s biggest holding the SPDR Gold ETF? He doesn’t own that many gold stocks, but still, he is überbullish about gold. If he really thinks gold will trade at $4,000, then why doesn’t he load up on gold mining stocks?
Maybe he thinks gold and gold stocks will completely disconnect, with gold going through the roof, while gold stocks tank just like the general markets? That trend might have already been developing over the last couple of months, as gold is at an all-time high, while gold stocks are still trading at levels where gold was trading about $500 lower.
If you would like to stay updated, visit www.profitimes.com and subscribe now for more articles, analyses and trading updates! You can now follow us on Twitter.
Willem Weytjens, originally from Belgium, is currently living in Oslo, Norway. He has been an active investor for over 12 years, forecasting the latest financial crisis, rise in gold & silver prices etc. He recently founded his own company, Profitimes, enabling him to spend all of his time dealing with financial markets.
We have written many articles over the past couple of months whereby we compared historical price movements with current developments.
To make the comparisons easier, I developed an indicator for the Prorealtime Charting software, which allows me to “go back in time”. The first article showed us that it’s possible that gold could explode towards $5,000 over the next couple of months.
“Possible is everything”, but what could cause gold to explode? Think about a total loss of confidence in currencies, and then we mean especially the US dollar.
As the second article showed us, the US dollar is headed for a crash against the JPY. We have already seen part of that crash, but then suddenly the Bank of Japan intervened and the price shot up. However, interventions don’t work (except for the very short term) in our opinion, and right now, the USD/JPY is already back around its lows, despite the interventions.
However, when you cross the street, you don’t just look at one side if a big truck is coming.. The same counts for investing. One should always consider different views. Therefore, we compared the gold price Wednesday with the price movement of early 2006 to early 2008 in the chart below:
We all know what happened with gold in 2008. It dropped from as high as $1,033 to as low as $681, as all assets were liquidated in order to obtain cash. We were experiencing a really big credit crunch.
As gold and stocks sold off in 2008, gold stocks were hit even harder than gold. If the comparison of gold now vs. 2008 would hold, then what should we expect from gold stocks?
One last thought: Why is Mr. Paulson’s biggest holding the SPDR Gold ETF? He doesn’t own that many gold stocks, but still, he is überbullish about gold. If he really thinks gold will trade at $4,000, then why doesn’t he load up on gold mining stocks?
Maybe he thinks gold and gold stocks will completely disconnect, with gold going through the roof, while gold stocks tank just like the general markets? That trend might have already been developing over the last couple of months, as gold is at an all-time high, while gold stocks are still trading at levels where gold was trading about $500 lower.
If you would like to stay updated, visit www.profitimes.com and subscribe now for more articles, analyses and trading updates! You can now follow us on Twitter.
Willem Weytjens, originally from Belgium, is currently living in Oslo, Norway. He has been an active investor for over 12 years, forecasting the latest financial crisis, rise in gold & silver prices etc. He recently founded his own company, Profitimes, enabling him to spend all of his time dealing with financial markets.