The vertical line is 8-76. To some of you younger woohonies...that looks like ancient times. Anyone that was alive in that time frame must be older than methuselah...that is the year I graduated High School. It was the USA's 200th birthday that year and gold sold for 101.5 dollars per ounce at it's low. Then, in 79 and 80 a couple of yahoo's attempted to corner the silver market...which I assume also drove the gold to what, at the time, where astronomical levels. This is when I was first introduced to the commodities market. The Hunt corner, like all before, collapsed and drove Nelson to file for bankruptcy. As it resolved itself out(blue horizontals) it remained for approximately 23 years in that range.
Advance a few decades and we come to the latest big pop...Now it seems to be in the same part of the pattern where it was after the Hunt bust settled into that 23 year range. One has to wonder if prices will settle in for a very long term range like it did after the Hunt crash. I was told in my first college level econ course that gold is a good store of value. The prof said...in 1878 an once of gold would buy you a quality suit of clothes...today(1978) an ounce of gold will buy you a quality suit of clothes...and in the year 2000 it will buy you a quality suit of clothes. I don't know what a suit from Books Brothers would cost today but if I had to guess...I would say, it would cost about an ounce of gold. If I'm wrong and a Brooks only cost you $1000.00...I would expect gold to go down to $1000.00 eventually. If it's less than that...gold will go down to whatever price a good quality Brooks Brother suit will cost you. This is just a theory...and given the advent of the world market a slave labor making clothes in foreign countries...it may not apply any longer.
Gold has always seemed to be an indicator of the value of the dollar or an indicator of inflation...or maybe more accurately...the valueless-ness of the dollar which seems to always tend to the less-ness. My parents always used to say...I remember when I could go to the movies for a dime. I could go to the movies for a couple of dollars...now...what does it take...10 or 12 bucks? I think we have passed into one of those times where things have gone up in price(the dollar has become worth less) and there it will stay. The value of the dollar has changed...the value of gold has changed with it and there it will stay. I think gold will resolve itself into a dollar reflection price of between 900 and 1100 dollars for a generation or so and then in 20 years or so we will have another pop up that will reflect the new generations even more worthless dollar.
Could be wrong...but as an older fart...that has been my observation of how this works.
Just looking at the chart...price is stuck in a range that one could fine down to a possible pennant formation if one was so inclined. Until price comes out of that mess, no direction is discernable.
Wake me up when it breaks out of the pennant so we can see if it continues out of the horizontal range...otherwise...it's a snoozer.
