Gold Up To $1,860?

"Goldrunner," at CommodityOnline, says gold's parabolic rise is accelerating. Correction and cosolidation periods are getting shorter.

Overall, the Parabolic rise in Gold appears to be accelerating on the chart as the corrections appear to be getting shorter in time and more shallow in terms of price. This is how a parabolic rise takes place. This also shows how the psychology of investors is changing toward Gold. The price of Gold slurs and chops higher on the chart as investors’ fear of the supply of Dollars being printed keeps on rising. U.S. investors are increasingly becoming concerned about how the increasing supply of Dollars is devaluing the Dollar affecting everything in their lives – the buying power of their income, the stability of their jobs, the worth of their possessions, and of the value of their savings.

Alarm over the implication of QE2 plus inflation outbreaks in other part of the world are fueling the rise. It's possible, according to goldrunner, for gold to make it up to $1,860 or even higher over the months before a major correction hits.


Gold is entering the blow-off third stage of its bull market, or a bubble. One possible scenario if gold goes manic: back in the late 1990s, tech stocks went manic but suffered a major purge in 1997-8. That downdraft led at least one commentator (David Dreman) to declare the tech bubble to be over.

Instead, tech stocks wiped the blood off and continued accelerating towards the blow-off end in March 2000.

Could gold follow such a scenario? Some may argue that it already has, from 2008. From a February high of around $1,035, gold sunk below $700 as the credit crunch wreaked its wrath. Trouble is, it's now 2011 and gold's still going strong but not very strong. 1997 + 3 = 2000. Had gold followed the tech scenario with 2008 standing in the place of 1997, then an all-out bear market should have started by now.

When gold goes parabolic, falls of that sort aren't part of the picture. Gold got slaughtered in the mid-1970s, but the carnage ended in 1976. More than three years passed before the blow-out top. As this chart from Casy research shows, today's gold market is advancing at a more modest pace relative to that of the late '70s:



Updating it for another year using today's gold prices make it seem even more modest by comparison. Of course, the metal avoided the 1975-6 slaughter; 2008's was mild by comparison.

It's a different gold market, to be sure. The only way to spot a blow-off-top is by seeing one unfold in front of our eyes.