Clark believes the window for buying gold at less than $1,700 an ounce is limited. He examined gold’s three largest corrections since the bull market began in 2001, including how long it took to recover from those corrections and establish new highs. He concludes that the current lull in gold prices will end soon, if it hasn’t already.
Gold set a record on September 5, 2011 at $1,895 and has since fallen as low as $1,531, a decline of 19.2%. In order to determine how long it might take to breach $1,895 again, Clark measured the time it took to mount new highs after big corrections in the past, and came up with two months (2003), 16 months (2006) and 18 months (2008).
The current correction has lasted almost 12 months. If we match the recovery time of 2006, gold would hit a new high (over $1,900) on Christmas Eve. That means the time to buy gold under $1,700 can be measured in days or weeks; this is bolstered by the fact that gold is moving up strongly, and that its strongest seasonal period is approaching.
Once gold breaches its old high, it will never again be available at current prices in this cycle. And it’s entirely possible that by this time next year you won’t be able to buy gold for less than $2,000 an ounce – unless it’s in ‘new dollars’ or some other currency that circulates with fewer zeros on the notes.
The data can help investors ignore the noise about gold’s bull market being over. If gold doesn’t hit $1,900 until December, they will know this is simply normal price behaviour and that basic patterns in the data are being overlooked. When the price nears that level again and others are caught off guard, they will already be positioned.
Regardless of the date, Clark is confident that a new gold high will come, because many major currencies are unsound, overburdened with debt and are being actively diluted by governments. Indeed, the ultimate high could be frighteningly higher than current levels. As such, he suggests taking advantage of prices that won’t be available indefinitely
The window of time to buy gold at current prices is closing. Take advantage of the sale while you can.
To read Jeff Clark article: Your Window to Buy Below $1,700 is Closing
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