Our friend Dennis Gartman has predicted a gold prices fall but another friend, Dominic Frisby in London, says 'not so fast...'
Well, gold is up about 16% on the year so far. So no bear market there.
This compares with an S&P 500 which is ever so slightly down; a FTSE 100 that's down around 10%; a commodities index that's also down around 10%; a US bond market that's up about 17%; and a US dollar which is ever so slightly up.
If we use the definition that a bear market is a market that is down 20% from its highs, then Gartman may well be right. I don't say it will happen, but there is a very good chance that gold could fall more than 20% from its early September high of $1,920 an ounce.
This would be perfectly normal. Gold has had three 20% corrections since this bull market began in 2001. Once in 2006, again in 2008, and just three months ago in September - yes, just three months ago. If you look at intra-day prices, it fell from a high on 6 September of $1,923 to a low on 26 September of $1,535. I make that 20%.
So, first, I look at the fundamentals for gold. Have these changed? No. If anything they've intensified. I won't go on about them here save to say we are going through a generational monetary unraveling and in such a situation you want to own gold. You may well also need your metaphorical tins, guns and bomb shelters at some stage, but I do not have a buy signal on those just yet.
You can keep visiting our website to get the best commodity tips and live gold prices in India here
You
should Trade Less But Trade Accurately & this is Achieved with our Tip.
