Gold not in Real Bull Market Yet / Commodities / Gold & Silver 2019
Is Gold now back in a bull market? Most goldbugs think so and are quick to proclaim that.
But, could Gold remain in a secular bearmarket? It hasn’t made a new all time high in 8 years and the perma-bull,financial asset loving crowd certainly believes so.
This is semantics because what really mattersis making money and nothing else.
With that said, Gold is not in a real bullmarket yet. We can still make money but the point is, when Gold enters a realbull market we will make a lot of money and quite easily.
Simply put, other than from 1985-1987, Goldhas never been in a real bull market without outperforming the S&P 500.
Take a look at the chart below which plotsGold (black) and Gold against the S&P 500 (blue).
Gold has performed well in nominal terms since2016 despite underperforming the stock market and that is because its exceptionalstrength against foreign currencies.
Some Gold-hating, financial-asset lovingperma-bulls have compared the recent move in Gold to the one in the mid 1990s.They didn’t do the proper research and analysis because this time around Goldmade a new all-time high against foreign currencies (FC).
That is an extremely strong positivedivergence whereas in the mid 1990s (and mid 1980s) Gold/FC showed a negativedivergence.
In both intermarket and relative terms, thekey relationship for Gold moving forward is Gold against the US stock market.The ratio is trying to carve out a long-term bottom.
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Good Luck!
Bio: Jordan Roy-Byrne, CMT is a Chartered Market Technician, a member of the Market Technicians Association and from 2010-2014 an official contributor to the CME Group, the largest futures exchange in the world. He is the publisher and editor of TheDailyGold Premium, a publication which emphaszies market timing and stock selection for the sophisticated investor. Jordan's work has been featured in CNBC, Barrons, Financial Times Alphaville, and his editorials are regularly published in 321gold, Gold-Eagle, FinancialSense, GoldSeek, Kitco and Yahoo Finance. He is quoted regularly in Barrons. Jordan was a speaker at PDAC 2012, the largest mining conference in the world.
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