How a Gold Bull Market Works
Every major gold bull market in modern history has consisted of three main stages:
1. Currency Deflation Stage
2. Investment Demand Stage
3. Mania Stage
During these three stages, gold prices typically rise in a parabolic upswing, which ultimately results in a sharp, skyrocketing price spike.
So far in today’s Gold Bull market, we’ve seen evidence of the first two stages.
Stage 1: Currency Deflation Stage, Gold prices increase because of currency devaluation. In this Bull market a dramatic drop in the value of the US$ against other world currencies has lifted Gold prices over the past 7 years. This devaluation is evident in the 42% drop of the US$ Index between the summer of 2001 and spring 2008.
Stage 2: Investment Demand Stage, Gold prices continue to grow due to increased investment demand. Attracted by the modest gains of the first stage of the Gold Bull market, investors begin to buy Gold as an investment, which further snowballs the price of Gold North, and with the introduction of the popular gold ETFs, and similar products, investment demand has had incredible strength since the beginning of this Gold Bull market, growing in terms of both tonnage and US$ demand.
Stage 3: The Mania Stage, there is no rush like a Gold Rush, and a speculative mania can kindle an inferno of popular greed. During the third stage of a Gold Bull market, mania buying will turns Gold’s parabolic upswing into a price spike that will leave investors rich in its wake.
The Gold Bugs are saying, “Make no mistake. The mania stage is coming.”
The Big Q: Why?
The Big A: Soon the US$ will collapse. It’s imminent, and when it does, the mania buying stage could skyrocket gold prices to previously unthinkable hights
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