Gold Had Two Cyclical Bear Markets In The Previous Secular Bull Market

Gold had two Cyclical Bear Markets (Waves 2 and 4 down, is Elliott Wave amazing or what) in the previous Secular Bull Market from 1960 (1960 is a very rough but reasonable start date, it could have been a few years later) to 1980, see http://www.forecasts.org/data/data/GOLD.htm and see http://www.goldmastersusa.com/gold_historical_prices.asp.

From May 1969 into 1970 there was a Wave 2 Cyclical Bear Market, in which gold declined -20%+, and, gold didn't begin making respectable upside progress until the Fall of 1970. From December 1974 until August 1976 (18 months) gold experienced a Wave 4 Cyclical Bear Market, in which it fell -45%+ in 18 months. A similar decline in the upcoming Wave 2 Cyclical Bear Market would bring gold into or near the $500-550 cycle low target range.

The bottom line is that, as a long term investor, one should never chase huge parabolic spike moves like the one since 8-16-07. After gold put in a Secular Bull Market cycle high at $850, $875, or whatever the actual cycle high was in 1980, it quickly plunged to the $400 range in roughly a year's time and fell well below $400 within about two years time.

....... http://www.JoeFRocks.com/ .