Nowhere in sight.
Gold has been making new all-time highs for years now.
As you might imagine, a high percentage of investors believe they have missed the boat. They feel that gold prices are as high as they can get and there is no room for them to get into this crowded trade.
Nothing could be further from the truth.
Thus far, central banks and Asian retail investors have been buying gold. Western investors are selling into this market…. not buying into it.
This tide will turn. Western investors will begin buying in large volumes. We will see new record highs well above the current gold price. Buying will then become even more frenetic. And you will be able to identify when the turn from a bull market in gold to a bear market in gold occurs because you read this article.
Today, I will share the indicators on which I focus to determine when the golden bull will stop running.
Spotting the Top
By looking back at the two previous gold bull markets, obvious indicators emerge to help us identify the top.
The two gold bull markets were from 1971 through 1980 and from 2001 through 2011.
There is no point in analyzing the gold price prior to 1971. That is the year President Richard Millhouse Nixon temporarily suspended the convertibility of gold to U.S. dollars and U.S. dollars to gold. Prior to August 15th, 1971, gold had a set, official price.
Once the tie between the U.S. dollar and gold was broken, the price freely fluctuated, and market forces started providing us with useful insights.
Here are some of these most useful insights I consider to identify the top of a golden bull market…
Duration… The bull market should last a minimum of a decade.
Price… Gold is expected to reach two to three times the previous bull market high.
Interest rates… Rates should be high single-digit or low double-digit levels.
The U.S. dollar… Clear strength and expected future appreciation is what the dollar should exude.
Sentiment… Everyone should be talking about how much money they are making in gold and silver.
Gold/Silver Ratio (GSR)… The number of ounces of silver it takes to buy an ounce of gold should be steadily moving toward a number between 35 and 50.
Geopolitical stability… Peace should break out all over the world.
Social stability… Harmony should be evident all across America.
Dow to Gold Ratio… This number should reach 5 or less.
Eventually, when the gold bull market ends, all the above indicators will be firing.
As we approach the top of the gold bull market, we will see one indicator, then another, then another. When we see four of the indicators starting to signal a top in gold, we should start to execute our exit strategy for our for-profit allocations to gold. We should start looking for the exits.
*Of course, your wealth insurance in gold is not to be touched… unless you have a financial emergency.
Are We There Yet?
No. Not even close.
Right now, not a single indicator is suggesting we are at the top. None.
Until they start firing, I believe the best way to proceed with your for-profit allocations to gold and silver are to buy on dips in price and take profits on surges in price. This sets up for a great opportunity to dollar-cost-average into this fledgling bull market.
If you do that, you will be buying well all throughout this bull market. You will also be taking profits all throughout this bull market.
And yes… that means buying right here and now at all-time highs.
The market has a vast amount of potential in it. The key to that potential is the Western retail investor. When those investors stop selling into the market and start buying into it instead, you will be extremely glad you purchased gold and silver here… near all-time highs.
I know of no better way for you the Keep What’s Yours!