Graph #1: Gold Bubble 1980
Now let us look at the present picture of the gold market since 2000 (graph #2) and compare it both to the ’70s bubble and to the typical bubble model. If, and this is a big if, history repeats, then gold is now in the Awareness Phase and, more specifically, at the end of a Bear Trap. If the gold price is to follow like in the ’70s the same pattern, or something close to it, then it looks not only possible that the price of gold will reach US$5,000, but even exceed it and approach the $6,000 level. As for when, if the ’70s’pattern repeats, even if not exactly in the same way, we could expect the Mania Phase to start somewhere between 2015 and 2017 and last until 2022-23.
Graph #2: Gold – Future Potential Bubble
Remember also that gold is not an industrial metal but mostly a monetary metal. As such, if we compare it to the US monetary base as shown in the graph below (graph #3), at an assumed gold ratio of 40% of the monetary base, then the gold price should today be around US$5,000 while, at a ratio of 100%, it should be over US$10,000.