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Aden Sisters Forecast - Bubble Phase in Gold to Begin in 2013 and Possibly Reach?

gold-speculator.com  ( Original )
JUL 26, 2012

Gold has been moving within a mega upchannel since 1970 and still has a ways to go before reaching the top side of this mega uptrend. How high is anyone’s guess but*were gold’s price rise to match the 2300% rise realized in the 1970s (and our research suggests we could see the start of the bubble phase by next year) we’d see a $6000 gold price, which would blow the gold price well above the mega upchannel. [Let us explain our conclusions with the use of 2 charts.

So say Mary Anne and Pamela Aden (www.adenforecast.com)

The Adens go on to say, in part:

If gold breaks above $1650 and stays there, the worst will be behind us. Then $1700, $1800 and $1900 will be the next stepping stones in the renewed rise. Record high territory would confirm the making of a strong leg upward.

How High?

How high is anyone’s guess. It all depends on the explosive stage in the bull market. That phase is still to come and Chart 1 provides a good example of this.



As you can see, gold has been moving within a mega upchannel since 1970. The gold rise since 2001 still has a ways to go before reaching the top side of this mega uptrend.

Note on the top chart that gold moved into the upper side of the mega channel when it burst into record territory in September 2009. This was just six months after QE first started in March 2009.

When gold reached the $1900 record level last September, the leading indicator (below) rose to the normal high area and it’s been declining since then, now approaching the uptrend and zero line.

This is the meat of the matter… the bottom line. The indicator is telling us that even though gold has risen in a clear consistent bull market for 11 years now, it has yet to reach bubble explosive levels.

Those moves would be more like what we saw in the 1970s. In those days, the full bull market rose 2300%. The current bull market since 2001 has only gained 660%… a far cry from the 1970s level.

There really is no fever like gold fever, and the fever hasn’t started yet. For example, for this bull market to gain 2300%, we’d see a $6,000 gold price, which would blow the gold price well above the mega upchannel.

When?

Chart 2 below shows this comparison well. Today’s bull market has not yet begun to move in bubble explosive conditions but it’s getting closer though and the timing suggests we could see the start of the bubble phase by next year.
 



The Current Situation

Today, however, the mood is down. Many are discouraged by the decline of the last almost 11 months. It’s really not because of the 19+% decline, it’s the length of time that’s taken the enthusiasm out of the bull market.

Don’t be discouraged, though. If this sluggishness lasts another month or even two, it’s fine and new positions should be bought on weakness. Buy on weakness and hold… a good strategy.