Will the next crisis be worse than the last one?
A Word of Warning ...
HERE ARE SOME EXTRACTS OF WHAT JAMES M., AN EXPERT WITH 31+ YEARS OF TRADING EXPERIENCE AND A FRIEND OF MINE, JUST DISCLOSED TO ME ON GOLD (SEP 10TH, 2019):
“If you’re not bullish on gold, I think you should be”, says James M.
(Note: This is “just” an expert’s opinion of a person who has more often than not proved us that there is a good chance his analysis turns out to be right. No one can foresee the future! Bear in mind that investing always involves risks. You are liable for your Investment decisions solely. We here at YourIRAGuide.com give our best to support you as good as we can by providing you with opinions, facts and analysis that we think are of excellent quality!)
He continues further in his statement:
Right now, the precious metal is undergoing a price transformation.
To the untrained eye, it may just look like gold is on a ‘good run’…
But if my analysis is correct, this is actually only the third major bull market of the last 50 years.
In fact, my view is we’ll never see gold at this price again. Ever.
I’ll explain why this week.
But let’s get straight to the point:
What does this mean for gold investors?
TRIPLE-DIGIT GOLD PRICE GAINS COULD BE MERE MONTHS AWAY
Let me ask you something:
Do you know what a ‘gold window’ is?
I define it as the moment when the gold price begins a new long-term rally.
There have only been three ‘gold windows’ in history.
If you can recognise them for what they are, you have a rare opportunity to profit from what could be an incredible run up in the price of gold.
The first ‘gold window’ opened in the 1970s, and the second came in the 2000s.
- The first ‘gold window’ remained open for nearly a decade. The yellow metal moved from US$35 per ounce in 1971…to a then unimaginable high of US$850 per ounce in 1980.
- The second ‘gold window’ lasted eight years. This time the precious metal rose from US$277 in 2002, finishing at US$1,028 in 2008.
Of course, while the gold windows were open for some time, it wasn’t until the final stages that the gold price really exploded.
YET THERE IS A LASTING LEGACY OF THE TWO PREVIOUS GOLD WINDOWS…
Analysing the past two windows helps us understand what CAUSES gold bull markets and, most importantly, how to IDENTIFY how far they can run…and how fast they can run towards the end of the trend.
What’s more, history shows that these windows tend to go through three unique stages.
#1: Currency devaluation
#2: Investor phase
#3: Mania phase
Now, before I explain, a quick word on stage three — what I call the ‘mania phase’.
This is when the gold price moves sharply upwards…
Take notice and starts jumping on the bandwagon.
The problem is, if you buy gold while this mania phase is in full swing, the biggest gains have typically gone.
The trick to riding a gold bull is to get on board during one of the first two stages.
Which is why Friday’s 2019 Gold Mania Summit is SO timely right now…
HERE IS EXACTLY WHEN YOU SHOULD BUY GOLD
The exact same thing kicked off the past two gold windows: A devaluation of the US dollar.
In the 1970s, the currency devaluation began when Richard Nixon took the greenback off the gold standard.
In the 2000s, the US dollar was weighed down by trillions of dollars of US government debt. Plus, foreign capital was fleeing to the newly created euro.
The second major US devaluation was underway.
Now, both times in the past, the currency devaluation phase only lasted a few years.
It’s hard to pick, simply because the gold price is increasing slowly…but you can spot it because the US dollar tends to fall faster than the gold price rises.
To know when the currency devaluation phase opens in gold, you need to be watching the value of the US dollar market…
And this is why so many investors miss the beginning of the window.
Within a few years, the currency devaluation stage is usually over…and then investors begin to climb on board.
Not your regular ‘mum and dad’ investors, though…
Like I said, unfortunately the so-called ‘little guys’ are always the last ones to discover the gold price is rising.
The investor phase is identified by one key trend:
That is, billion-dollar institutional traders who start buying up gold.
These aren’t the sort of buyers who buy gold in ounces or kilos…but by the TONNE.
‘Big money’, or ‘smart money’, has been the main driver of the investor phase in both previous gold windows.
And they tend to create a sudden surge in volume from buyers with extremely deep pockets.
Gold futures have been trading on Wall Street for what seems like an eternity. However, gold futures contracts weren’t created until 1974.
This sudden ability to ‘trade’ the gold price — instead of buying and holding physical gold — brought a whole new wave of investors to the gold market.
In short, being able to trade gold futures brought the ‘big money’ to the gold market table.
The same thing happened again in the 2000s…
This time, it wasn’t gold futures booming during the investor phase… It was exchange traded funds (ETFs) buying gold.
Between 2004 and 2006, US-listed ETFs bought up 500 tonnes of gold…
Within two years, US ETFs had 19 times more gold under management!
Let me put it this way…
During this time, the yellow metal rallied 45% in value.
Yet US ETFs increased their physical gold holdings by 1,800%.
Meaning, the interest in buying physical gold dwarfed the actual price gain in the precious metal.
Put simply, the gold price didn’t reflect the true interest in the metal.
However, the sudden increase in physical gold signalled that a very important shift was underway.
One that would soon see the gold price spike…
THE BIG CLUE THAT GOLD WAS ABOUT TO
TRIPLE IN VALUE IN LESS THAN THREE YEARS
The big increase in new buyers of gold told the market one thing:
That we were moving into phase two of the gold window — the investor phase.
You can tell an ‘investor phase’ in two ways…
- It’s the period where the volume of physical gold increases…
- And then — seemingly out of nowhere — gold stages a selloff. It corrects by about 10%.
This 10% correction is a crucial step in the investor phase.
In the past two investor phases, the 10% correction left a new ‘floor’ for the gold price.
A price point at which the yellow metal never traded at again.
- In the 1970s, the yellow metal dropped to US$110 per ounce in 1976. Gold then went on to rally all the way up to US$850 in a little over three years.
- Similarly, during the second gold window, the price of gold dropped to US$330. Just three years later, an ounce of gold was going for a smidge over US$1,000 per ounce.
And guess what?
The same thing happened between May and August last year.
In May 2018, gold fell sharply…and corrected down by 10%…until it finally bottomed out on 17 August at US$1,180/oz. – as you can see here:
THE 10% FALL IGNITES THE RALLY
This was the confirmation signal I’d been looking for.
The same pattern that occurred in the past two gold windows happened…exactly like the one that occurred in late ’76…and just like the one that unfolded in ’03.
And look at the chart — gold hasn’t traded this low since.
If you look at the previous two gold windows, you can see what happens next…
A gold MANIA market.
Something else has me excited too…
See, not only is the 10% price correction over with, but the next part of the investor phase in the gold window is happening right now…
Big money is moving into the gold market.
And this time, it’s not money from Wall Street.
No, this time, the investor wave is being flooded with the biggest buyer there is: CENTRAL BANKS.
Just check out the pace of central bank gold buying this year compared to every year since 2010!
This suggests to me something extremely significant is going on behind the scenes in the gold market. Central banks rarely increase their gold holdings by so much SO quickly.
Here’s what I think: Central banks are buying gold while it’s still cheap.
This only adds weight to my gold window theory…and the opportunity presenting itself to you today.
YOUR LAST CHANCE TO BE PART OF THE THIRD ‘GOLD WINDOW’
Right now, we are seeing two major indicators of the investor phase of the gold market play out.
First, the 10% price correction completed in August last year.
It leaves us with what is potentially a ‘new low’ for the gold price. A price which the yellow metal has not traded at since.
All this year, central banks — the ones with the big, fat wallets — have been buying up gold at rates not seen in a decade.
These two factors are telling us that the investor phase of the gold market is well underway.
And what comes after the investor phase?
THE MANIA PHASE
The time when the price of gold makes a never-before-seen leap higher — in a rapid amount of time.