Are We Or Are We Not In A New Gold Bull Market?

By Jack Chan of The Gold Report

Experience, Creativity And Dedication To Finding And Presenting The Best Investment Ideas • Apr 28, 2016 at 1:33 AM EDT

Technical analyst Jack Chan has examined the charts and says that if we are in a new bull market, prices in both gold and gold equities should begin to pull back and consolidate soon.

As suggested in our previous analysis, we need to see a couple of things happening in order to welcome a potential new bull market:

#1. COT data to return to bull market values.
#2. Gold price to exceed the 2015 high at $1,302.

Nobody can predict when this will happen, but we can prepare by looking at the past bull and bear markets so that we can recognize a new bull market if and when it materializes.

The bear market from 1981 to 2001

Gold Spot Price

After topping above $700 in 1981, gold lost more than half of its value in just over a year, followed by two sharp bear market rallies, and then died a slow death over the next 12 years.

Gold and Silver Index XAU

Gold stocks as represented by XAU had two bear market rallies during that 20-year bear market, with both rallies gaining over 100%.

The bull market from 2001

Gold Spot Price

The bull market in gold, which began in 2001, did not start with a price spike. In fact, rallies were followed by sharp pullbacks and multi-month consolidations, which are signatures of a bull market.

NYSE.Arca Gold BUGS Index

Gold stocks as represented by HUI did the same. In fact, the initial rally gained about 100% and was followed by a multi-month consolidation. And this same pattern went on continuously throughout the bull market.

The gold market now

Gold Spot Price

So far we have a 20% price spike in gold, with no correction/consolidation yet.

HUI Gold BUGS Index

Gold stocks as represented by HUI have spiked up 100% with no pullback.

Summary

If we are in a new bull market, prices in both gold and gold stocks should begin to pull back and consolidate soon.
If we are still in a bear market, then prices can push somewhat higher, followed by a sharp decline, losing all of its gain or more.
I remain patient and wait for the market to tip its hand.

Disclosure:

1) Patrice Fusillo conducted this interview for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None.
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3) Barry Allan: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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STOCKS IN THIS ARTICLE

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