why the gold price is not a bubble, page-11

Let me be clear. I'm only trying to be open minded here.

Quote theiain1
"So is gold in a bubble now? Maybe - it looks like it could be (although we do have some healthy periods of consolidation this time) but it's got to fall a long way and probably suddenly (to around 350-500)

Quote Champ:
"Sorry theiain1 but that is just a load of rubbish."


I'm NOT suggesting for a second that gold will fall to 350-500.
I'm saying this would need to happen for me to call the very strong move up from 350 in 2001 to our recent high of 1265 a bubble.
For it to actually be a bubble it needs to crash (burst) back to around where the move started.
I'm also suggesting that this move up has had periods of consolidation offering support unlike the very sharp rise in the 1973 - 1980 move.


Quote Champ:
"If gold were to fall to those prices almost ALL gold mines would shut down immediately globally as almost all mines would be running at a loss."


Yes but unfortunately Champ the gold market doesen't listen to what gold mining companies want. Remember, the gold mining co's are there pulling the stuff out of the ground and selling it for profit because of the price gold is today.

And to quote myself:
"For these reasons I would hesitate to call a bubble in gold atm, it may well prove to be part of a longer term trend. I can't see prices reversing back to historic lows any time soon."

These moves we have seen in the gold market over the years including the move Jan 1980 High of 850 and the move back down to 350-400 for 9 years of sidways before taking off again to 1265 today could be part of longer term secular trend (25-50-100 year). On the longer term charts we may see them as normal trending moves when gold is much much higher.
Seeing prices fall to these historic lows of around 350 is extreemely unlikely (almost unthinkable especially given the current state of things).


Final comment:
Gold has be performing so well it would take a fairly significant fall to even inflict any technical chart damage.
I'm looking a the cup and handle with a target of $1650 by early next year. After that who knows, 3000-5000

Tonight is a great example of the strength in gold
$1227 (old resistance now serving as support and LHS of cup pattern) held and bouced back to 1240 odd.

Enjoy the ride people.