GOLD Echoes of 1970s
Clive Maund
Everyone involved in the gold market knows about the great 70's gold bull market and how it climaxed with a vertical spike. I have on numerous occasions written that, because of the exponential explosion in the growth of credit, derivatives and the money supply, which dwarfs that of the 70's, the current gold bull market will similarly go on to dwarf that of the 70's. Relative to where it's going, it's barely started yet. If hyperinflation develops then clearly the gains in gold will be of astronomic proportions.
But even if we take a 70's type scenario for the gold bull market as a "bottom of the range" guideline as to what to expect, it follows that we can look forward to very substantial gains in the time ahead. With this in mind I present a most interesting chart that shows the current bull market overlaid on the 70's bull market. I am sure that I don't need to point out to readers the uncanny parallel that exists between these two price tracks. If this similarity continues then we can expect to see a rapid increase in the rate of rise as the year unfolds. After that, however, these charts should part company, as the far more serious fundamental problems of the present time are expected to drive gold to much higher levels than were attained in the 70's.
Clive Maund, Diploma Technical Analysis
clive.maund@t-online.de
www.clivemaund.com
Kaufbeuren, Germany, 21st January 2004
No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.
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