With the war in gold continuing to rage, today one of the most respected veterans in the gold world sent King World News a fantastic illustration which sums up the war in gold in one incredible chart. Below is James Turk’s extraordinary chart as well as his comments on the war in the gold market.
Gold clearly remains in a multi-decade bull market. That is not surprising because as long as central banks continue to debase national currencies by printing to feed the insatiable appetite of politicians for spending, the gold price will rise. But clearly gold doesn’t go up in a straight line.
We can see on this chart two distinct bull market moves in the 1970s, both of which are circled in red. We then had the 20-year correction through the 1980s and 1990s, followed by another bull move which I have also circled in red (above). The gold price has now retraced back to the green uptrend line, which interestingly enough, is exactly what happened in the 1970s before gold rocketed higher to its January 1980 top at $850 (see chart above).
Given that central planning is destroying economic activity and central bankers are also destroying the purchasing power of national currencies, we can expect the gold price to head higher. That’s why I’ve drawn another red circle above the one just completed, based on what happened in the 1970s. I expect history to repeat (see chart above).
It is impossible to say that gold’s correction ended last week, though Friday’s big rally was indeed encouraging. In the short-term, the best thing that can happen is for gold to form a “V” bottom. This “V” bottom would signal a key trend reversal, and mark an end to the correction in gold that began three years ago.
So over the next few weeks let’s see if gold can climb back above $1180 as a first step, and then rally further up to the $1240 area. That would complete a “V” bottom. And if it occurs, the odds will then strongly favor gold entering a new uptrend, just like it did on the above chart after its August 1976 low.”
Source King World News
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