I write a lot about central banks, commercial banks, the economic cycle (the likelihood of a recession), valuations of other financial assets (particularly stock prices) and interest rates. All this, of course, for good reason. Every single one of these factors is of great importance to understand how gold prices will perform in the future. For clarity sake, I will just go ahead and answer the question I posited in the main title: gold prices will most definitely go below $1,200 per troy ounce. We currently find ourselves in a sideways market. And that means that the recent price rallies are mostly based on thin air. Of course: the current (global) debt levels are unsustainable and the Fed has no viable exit strategy (the same goes for all other major central banks). A painless way out from the impossible position in which central banks have maneuvered themselves does not exist. However, all this says nothing about the gold price in the short run. Is this a reason to, for the time being, not invest in gold? Let´s take a look at some very interesting data, because believe me when I say that you are in for a great surprise.

“I´ll Buy Gold When the Market Turns and Gold Gets Bullish Again”

Blue line: All days, orange line: All but the best ten days. Source: GoldRepublic, St Louis Fed, data modified by the author

The 10 Worst Days – Avoiding “Downside” Is Highly Profitable!


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