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Gold’s in Year Three of a Long-Term Bull Market. Now the Fun Begins

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You may be familiar with my forecast that gold has entered a new secular bull market, the third in my lifetime.

The first was 1971 to 1980 when gold returned over 2,000%. The second was 1999 to 2011 when gold returned over 650%. The new bull market began in December 2015 and has already returned 27% in its early stages.

Gold was up in 2016, up again in 2017, and is one of the best performing asset classes so far in 2018. History shows that the best gains in secular bull markets are not in the early years when the trend is unnoticed and has few believers. The best gains come in the third, fourth and fifth years when the trend becomes widely followed and investors flock in from the sidelines.

That’s where we are right now in this new gold bull market. With hindsight we can see a bottom clearly formed at a price of $1,050 per ounce in December 2015 at the tail end of the brutal 2011 – 2015 bear market when gold fell 50%. Sentiment was so bad then, and drawdowns were so frequent that even gold advocates didn’t seem to notice that gold was showing solid performance after 2015. 

This article is good evidence that investors and analysts are starting to notice that the bull is back. The article projects a gold price of $1,500 by year-end 2018 based on an industry-wide survey conducted by an affiliate of Thomson Reuters.

My own year-end forecast is a bit more conservative, closer to $1,450 per ounce, but the multi-year trend is certainly higher. The article makes specific reference to the fundamentals of scarce supply combined with continued strong physical demand from Russia, China and India.

The important news for you is that it’s not too late to move into the gold sector and enjoy the fruits of a secular bull market. The trend is still in its early stage. The party is just getting started!

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