Gold & Silver Bear Market: Near End?
Pubblicato: 06/01/2014 21:41:40Gold's bear market took it to a new closing low in New York, below $1200 per ounce. The gold mining shares also closed at a new low. So to repeat: The bulk of the evidence leads me to believe that we probably have not seen the bottom, though we are very close. Bottoms can happen in an instant or develop through a basing process. Huge immediate rebounds originate from extreme oversold conditions. We don't have that at the moment.
The bad news is obvious. Gold and silver are breaking again. However, the good news is this will lead to the end of the bear market and a "back up the truck" or "fat pitch" type of buying opportunity. History makes a strong case that this bear market is about to end. Couple that with precious metals touching multi-year support levels and the bear market has a very high probability of ending.
First, we'll look at gold. The chart below shows all of gold's bear markets though we excluded the two extremes: the 1980-1982 (a 65% decline) and the 1987-1993 bear (lasted five years and only declined 35%). The current bear best resembles the bears of 1976-1976 and 1983-1985. The fact that the current bear is longer suggests it will be less severe in price. Gold's shorter bears (including 1980-1982) ended in a panic selloff. It appears this bear will share the fate.