The Precious Metals Bull Markets
Bull Market from 2000 to 2011
The precious metals bull market that started in 2000 reached a great valuation by 2011:
- 2000–2011: Gold grew from $250/oz to $1,920 and Silver climbed from $5 to $50.
- 2011–2015: Then from 2011 to 2015 they fell — Gold to $1,045 and Silver to $15.
- 2015+: Since the end of 2015, both metals have been showing signs of a reversal of the medium-term bearish trend and the beginning of a new precious metals bull market.
Looking at the Past: the Bull Market from 1970 to 1980
In 1970, when a precious metals bull market started, Gold priced $35 and Silver $1.50.
- 1970–1974: Precious metals grew — in 1974 Gold hit $200 and Silver $6.50.
- 1974–1976: Until 1976 the prices dropped, Gold to $100 and Silver to $4.
- 1976–1980: They steadily climbed until 1979, and then precious metals exploded in 1979–1980 when Gold reached $850 and Silver $50.
What This Analysis Shows
I will show you evidence on the precious metals sector, also looking at copper prices, that demonstrates that the 2011 sector peak is not similar to the 1980 one — and that the 2011 peak is more similar to the 1974 one: a mid-term top.
The 1974 Peaks
Gold — 1974 Peak
Silver — 1974 Peak
Copper — 1974 Peak
The 1980 Peaks
Gold — 1980 High
Silver — 1980 High
Copper — 1980 High
The 2011 Peaks
Gold — 2011 Top
Silver — 2011 Top
Copper — 2011 Top
Bull Market Peaks Comparison
The Chronological Order of Peaks
| Peaks | 1974 | 1980 | 2011 |
|---|---|---|---|
| Gold | 27 Dec 1974 | 21 Jan 1980 | 06 Sep 2011 |
| Silver | 27 Feb 1974 | 21 Jan 1980 | 25 Apr 2011 |
| Copper | 06 May 1974 | 12 Feb 1980 | 14 Feb 2011 |
Why Did Precious Metals Peak Almost on the Same Day in 1980 but Not in 1974 and 2011?
At the end of a secular sector bull market (as in 1980 for precious metals), investors want to buy every asset in that sector they can. Investors are gripped by the fear of missing out, and prices peak almost simultaneously — when all asset prices reach excessively overvalued levels and there are no buyers left.
Is It Enough to Say That Precious Metals Will Rise Like They Did from 1976 to 1980?
No — but precious metals and other hard assets have compelling reasons to appreciate in the coming years. The primary reason is that all major world currencies (Dollar, Euro, Yen, etc.) have been backed by nothing since 1971, and central banks are able to create them in unlimited quantities.