Precious metals expert Michael Ballanger has done his research and believes the long-term and intermediate-term status of the gold market and its associated gold miners is unequivocally bullish. In this article for The Gold Report, he lays out his case, explaining that every indicator he has used since the late 1970s is kicking into gear.
On Dec. 3, 2015, the gold market completed a 51-month bear market by touching down at $1,045.60; the market for gold miners, as represented by the NYSE Arca Gold BUGS Index (HUI) Index, completed a 51-month bear market bottoming on Jan. 19, 2016 at 99.09. The home of a vast majority of junior exploration companies, the TSX Venture Exchange (TSX.V), recently completed a 58-month bear market finding its trough on Jan. 20, 2016 at 466.43.
These three bear markets will go down in history among the most vicious bear markets ever. Some were longer (1988-1993) and some were sharper (2007-2008) but only one bear market compares in terms of misery and that was the 1975-1976 bear market that saw gold drop from $190/ounce ($190/oz) to around $110/oz after gold advanced from $35/oz to $190/oz in reaction to Nixon taking the U.S. off the Gold Standard by abandoning the Bretton Wood Agreement in 1971. That bear, a precursor to the most dramatic, wealth-preserving ascent in gold’s history, was particularly acute because of the speculative mania that gripped the junior mining and exploration market from 1971-1975 during the initial blast to $190.
When the correction began, investors were embarrassingly long a vast amount of gold-related securities and even more so the penny miners that didn’t need gold (or anything else, for that matter) to be swept up in the fever. Naturally, when the price of gold began to correct from $190, it mirrored the September 2011 peak in …read more