The gold price chart of 50 years has an outspoken long term chart setup: a rounding bottom. In technical terms this is basing pattern. What makes this exceptional is (1) it took 8 years to complete and (2) gold has a track record of success with this type of long term pattern. This is clearly a long term bullish pattern. The setup on the gold price chart on 50 years is clear: gold is moving to all time highs. We will see $2,000 USD/oz in the next few years, the question is when exactly. In this article we try to forecast when this might happen, and also how. Note that this chart was also featured in our latest annual gold price forecast.
Note that even on Quora people are asking for gold price charts that have a message. There are lots of charts, there are not lots of charts with a message. We want to fill this gap at InvestingHaven, it’s the problem we try to solve on this site with our team.
As per Tsaklanos his 1/99 Investing Principles it is 1% of the times that a market undergoes an important ‘event’. In other words 99% of the times a market, as well as a chart, are uneventful.
Think about this.
How many times have you seen charts, and how many times have you been able to figure out those really few but exceptionally important ‘events’ on a chart. The ones that have a high value for investors.
Relevant events for investors are visible on the longest possible timeframes. That’s why we pick the gold price chart of 50 years.
That’s where most dominant trend is visible.
Gold Price Chart Of 50 Years: Giant Rounding Bottom
Below is the 50 year gold price chart. It is a quarterly chart. We believe this chart contains a wealth of insights. It is especially useful for our gold price forecast but also to understand the important ‘events’ for investors. Let’s review the insights we derive from this gold chart, and how it is useful for gold investors. We’ll start with the big picture conclusions, those ones that take 5 decades to conclude!
- Gold’s bull markets tend to rise in 3 phases. Each phase is more aggressive in its rise. We saw this twice, once in the 70ies and once in the previous decade.
- The consolidations tend to also have a similar pattern: a rounding formation that ends with a horizontal breakout. We see this once in the 80ies and 90ies, a huge consolidation period of 2 decades, and once in this decade.
- The strong rallies occur a minority of the time, particularly in phase 3 of an uptrend. That’s when most money is made. We saw this also twice, similar to #1.
Currently we see the confirmation of the horizontal breakout that took place in June of 2019.
The gold market will rise in a way, shape or form that we cannot exactly predict. However, what this gold price chart of 50 years learns is that gold is in a new uptrend.
New Bull Market Started On Gold’s 50 Year Chart
Note that we are no perma bulls nor perma bears on silver, gold or any other market. It was clear a few years ago that we were bearish on precious metals. We were vocal about it. Now, we are bullish on precious metals because our leading indicators as well as our charts bring a bullish story.
The point we try to make is this: investors want to be invested in markets that are trending higher. It does not make sense to be perma bullish on a market that is flat because you don’t let your capital work. As per Druckenmiller’s investing insights:
The mistake 98% of money managers and individuals make is they feel like they have got to be playing with a bunch of of stuff. And if you really see it, put all your eggs in one basket and watch the basket very carefully.
Gold was bearish and turned bullish in 2020. Period.
#gold is in a new bull market. That's what our exceptional gold #chart on 50 years says. It also shows a giant rounding bottom. Every time this happened in the last 50 years it morphed into a bull market! 'Buy the dip' in gold.… Click To Tweet
How To Play Gold In 2020 and Beyond 2021
With all the points made above we conclude that we have to give the gold market the time it needs. Buy the dips, slowly accumulate. This horizontal breakout is something we have seen before, and it is strongly bullish. It is the basis of our gold forecast for 2020 and beyond 2021.
The classic ‘buy the dip‘ approach applies to gold, as well as silver!
This is what we wrote in our latest annual gold forecast for 2020 and beyond:
Gold ended its 8 year bear market. It started an 8 year bull market in June of 2019 after a horizontal breakout.
The rounding pattern on gold’s chart suggests gold will rise to $1,725 in 2020 and may test $1,925 in 2021. Note that these are spikes, and prices will retrace after hitting those peaks.
We also do not forecast gold to rise to all-time highs after the first test of former all-time highs. It might take 3 attempts before gold breaks out to new highs.
We feel very strong that gold’s long term has a clear message, and we are confident about the prediction in this article. ‘Buy the dip in gold‘ in the years to come is what the 50 year gold price chart suggests! By doing this in a disciplined way investors can accumulate gold holdings over time.
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