Are We Seeing Gold's Last Hurrah?


Przemyslaw Radomski of revisits the great gold bull market of 1977-80 for clues into whether or not we are currently looking at the last stages of the current gold bull market.

This essay is inspired by a question we received from one of our subscribers. On December 2012, we published an essay on gold and the dollar collapse in which we pointed out why you might profit from gold even if the US dollar doesn’t deteriorate completely. Today, we will elaborate on why we actually use the 1980 top in comparisons.

The fact that nobody really knows with absolute certainty where gold will really go from today onward makes people try to make their own guesses about what can happen with the yellow metal. One of the methods to do that is to look back into past situations and try to estimate if what is happening now is somehow similar to those past events.

In fact, history doesn’t repeat itself precisely. What happened once doesn’t come back in exactly the same way. Because of that the future is not something that is completely predictable and those who aim to predict it (for instance analysts and investment tools). But what happens now can be similar to what has happened before. J.R. Colombo wrote “‘History never repeats itself but it rhymes,’ said Mark Twain”. It may be possible that some patterns repeat themselves. The same goes for everything that’s happening with gold. And even if past patterns don’t give you any certainty, sometimes they can limit the uncertainty.

The situation in the gold market today is different than that one in 1980 in a few important areas.