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Time for Goldbugs to Admit Defeat?

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Published : December 04th, 2013
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( 14 votes, 4.9/5 ) , 17 commentaries
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Category : Gold and Silver

After a 12-year run, it looks like gold's wave has truly crested, and many bears are arguing that it's all downhill from here. A quick glance at a long-term gold price chart can certainly seem to confirm this impression.

Gold's price has fallen by more than a third since its 2011 high. The downturn exceeds the 2008 waterfall selloff. Many technical analysts are saying that the "damage" on the charts is too great for gold to recover. The rout is so bad, even hardened goldbugs have grown quiet lately.

Is it time for gold investors to admit defeat?

Well, if it were true that "damage" on a chart such as we've seen signals the end of a bull market, perhaps it might be. But is it so? Or is this just a correction?

One of the greatest bull markets in modern times was the Nasdaq in the 1990s. The Nasdaq composite rose a whopping 1,150% over the span of a decade. But did you know it had a major correction in the middle of that run? The same is true of oil's big surge in the mid-2000s. Consider this chart of the big corrections oil and the Nasdaq experienced:

After seeing prices crash in both the Nasdaq and oil, most investors assumed those bull markets were over—but they weren't. Here's the subsequent rise in each after prices bottomed:

The Nasdaq and oil did recover from their large corrections—despite all the technical "damage" many pointed to as proof that those bull markets were over. Investors who sold their positions during the downdrafts missed out on some fantastic profits.

Given that all the reasons gold rose from 2001 to 2011 are still in force, I am convinced gold's current correction is the setup for a second big surge—and, ultimately, a true gold mania of historic proportions.

Just because gold doesn't seem to be reacting to Fed money-printing at the moment doesn't mean it won't. Sooner or later, reality trumps fantasy. Reason says that you can't quintuple your balance sheet in five years and expect no repercussions. The Fed keeps hinting it will taper its money printing, but it still has not. We've had QE1, QE2, Operation Twist, and now QE3… none of them has worked, and the new Fed chair wants to print even more money.

It's pure fantasy to believe there will be no consequences to these actions—and the reality is that whatever else happens, gold will react positively.

Should gold investors admit defeat? I say it's reckless central bankers who should declare defeat.

A gold recovery is inevitable. Prepare accordingly. Try BIG GOLD risk-free for 3 months to access our GLD put strategy, frequent bullion discounts, and the producers that will respond the strongest once the recovery takes hold. 100% satisfaction, or your money back—click here to get started.

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Jeff Clark is the editor of BIG GOLD, a Casey Research publication focused on the safest ways to profit from the current bull market in gold.
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It will not surprise me to see gold hit $725 now that I have just had a quick glance at a monthly chart.

Currently long physical gold, shares in 2 mining companies (very recently) and short gold in the CFD arena.

I will not swap my gold for dollars, nor will I throw gold or paper dollars into the sea.
Rate :   0  1Rating :   -1
"If the Hail Mary save the Euro" . . . very good .... as a fervent Roman Catholic , I believe in Her , but , I may say , even if I do not belong in the great mysteries and secrets of God , I would be very surprised of such a miracle . . . . who knows , but we never saw Mary the Pure helping the devil .
Rate :   1  8Rating :   -7
Ah, the charts....

yeah, the manipulators don't give you the charts of their plans,
only the charts of the past manipulations....

Wondering if gold will hit $1,600.

Maybe if the Euro's ECB starts a centralized/legalized QE
of their own, to Hail Mary save the Euro, and then US QE
goes structural as a very long-term program, and the bank
cash-reserves become permanently sequestered in
order to preserve may go even lower.

I Dunno, but the prices are low, the trend is negative,
and in 2004 you could buy silver for around $6-7, and
gold for around $450.

Anyone think that is where the manipulators are headed?

Rate :   4  6Rating :   -2
We were defeated a while ago, now we just lick our wounds and wait for them to come finish us off.
I won't be fooled into the gold market again in this life time thank you very much.

... and to think that I also looked at bitcoins way back when they were $10 and dismissed them as nothing but hot air.
Last time I looked they were 800 bucks. Sigh.
Rate :   0  9Rating :   -9
You may have been defeated but please don't state that "We were defeated a while ago, now we just lick our wounds and wait for them to come finish us off." I, and many like minded individuals, know that we are a long way from being defeated and you will regret your past decisions to rid yourself of what could mean the difference between eating and dyeing hungry.
Rate :   8  2Rating :   6
Oh I regret my past decisions alright, my decisions to buy gold and silver in the first place. It's a mugs game.

I know, lets all have a game of monopoly... I'll be the banker and I'll manipulate the property prices on every roll... anybody want to play?

Rate :   1  7Rating :   -6
As one who has been defeated on the PM's front, can I ask why you still bother to read anything on this site? Unless you needed fiat to survive and therefore sold your PM's you will have no one to blame but yourself when you see those of us with PM's thriving after the $ crashes as it must, as all fiat butt wipe does eventually. It appears that deep down you regret selling, well buy back now while the stuff is on sale.
Rate :   8  2Rating :   6
This windfall change that we're all waiting for with the $ can't happen with complacent populations that are incapable of keeping their governments accountable, let alone of revolution. Even then you'd probably still need to survive for a generation or two before order is re-established and you can spend your gold safely.
Rate :   1  7Rating :   -6
I believe that if you did a little light reading about Weimar Germany you would find yourself second guessing the whole 'generation or two' thing. Those that had PM's during the Weimar period ate, those who didn't, well they didn't. Did it take generations before those with PM's were able too use them, not at all. Do the research, your in for a surprise.

That's not saying that other items weren't or won't be used for barter but PM's are buried deep in the human psychs and will always have value attached to them in any circumstance.
Rate :   8  3Rating :   5
Are you expecting your current government to start a crazy conquest of all its neighbours any time soon? If you live in the USA then I find it even stranger that you expect your nation to be the loser in such a catastrophic event, since the winners get trainloads of gold to divvy up as the axis powers did after WW2. Is it really so safe to be a holder of gold in a conquered nation, even if you did survive the conquering? I expect it would also attract unwanted attention/theft/looting from the new authorities and/or your fellow countrymen.
Rate :   1  7Rating :   -6
It appears that you read my comment with a biased view, yours, and completely missed the point I was making.

You appear to be cemented to your view of the world. So sad that you've taken this view, either that or you are (have become) one of the government shills we so easily abuse on this and other PM sites. What you in fact are doing is pushing the gov/fed line that PM's are barbaric and we all need to give ourselves over to the fiat pushers as they KNOW that as slaves to them we are better off.

And I thought you were against those that use debt to enslave mankind. Best give more thought on how you view PM's and who you end up serving with this.

Rate :   8  2Rating :   6
I wish I was a government shill, then I could enjoy some kind of payoff from the subject. :) I didn't say a word about barbaric... I acknowledge the history and I'll still argue that gold is a better money than paper.

And I think my point is valid. For every person's neck that was saved by gold in Weimar Germany, there were probably at least as many that were cut for the very same reason.

But I won't put a cent of my (family's) income or money towards PM's again. End of story. Once bitten, twice shy. I mean seriously... do they really expect private citizens to go up against the likes of government, central banks, bullion banks, commercials etc. and win? Who was I kidding?

In celebration of my idiocy, 6 months ago I took a stack of 1 oz silver coins and hurled them into the sea one by one (I figured the fish deserved them more than the pigeons). Very liberating.
Rate :   0  6Rating :   -6
"But I won't put a cent of my (family's) income or money towards PM's again."

"In celebration of my idiocy, 6 months ago I took a stack of 1 oz silver coins and hurled them into the sea one by one"

Yes, yes you are an idiot. Instead of taking the silver, selling it and getting whatever you could for it to feed your family you instead took it all and tossed it into the salt chuck to satisfy some stupid sense of self-pity for a misguided feeling of having done the wrong thing. Then you heap more self-pity on yourself by telling all here how stupid you really are. Given the above I'm sure you won’t object to me calling you a complete and utter moron who deserves to be hit in the face with a bucket of his own excrement.
Rate :   5  1Rating :   4
Yes I though that might raise a spark. Get over it clown. I do what I want with what I work for. And no its wasn't "all" of it... it was a symbolic amount... maybe 5% of what was lost to market prices.

A liberating act, cleansing me of a miss-placed trust and putting too much value into a metal and not enough into people. Maybe you should do the same.
Rate :   0  6Rating :   -6
Btw... don't suppose you know me or my motivations. I'm not asking for pity at all. After all my losses in PMs I'm still not an unhappy guy. Certainly not to the point where I need to get online and hurl abuse at people for having an opinion that differs to mine, or to do things that I might disagree with.... this is the "land of the free" at its best I suppose?

Good luck to you with your foul-minded existence. Guard your little pile of metal and throw excrement at everybody while you wait for your next instalment of psych 101 that seems to feature on the back of your cereal boxes this month. You sound like you're all set for the new world order.
Rate :   0  4Rating :   -4
Wow, guess I hit a nerve dead on, otherwise why would my last comment garner two responses. It's good to see that you (supposedly but I don't believe it) feel no guilt for doing something as ridiculous as tossing silver into the ocean. Do you also play on the freeway and feel great about it? Your right I don't know you, thankfully. I chose people I associate with carefully and avoid those who display actions and make statements that show an underlying lack of common sense.

As for my foul minded existence, have a look in the mirror, you’re the one that decided to toss silver into the sea without considering that you were wasting money (however you define it) to satisfy some twisted need to feel even worse about having bought the stuff. Who cares that this could have been used to buy school books for your kids or maybe even feed some homeless people. Point here is that you don't deserve the things you have when you recklessly waste what others desperately need to live so don't come in here expecting that we'll cheer your stupidity. You really want to feel better after making what you consider a mistake then take what PM’s you might have left, cash them in and help some homeless kids get a hot meal. A good deed may cancel out your feelings of stupidity.

I can only laugh at your comment about my being all set for the new world order. Do you believe you'll fair better? Oh wait, you just might since you'll have an abundance of butt wipe fiat $ stashed under your mattress. And lets be clear, you’re the one that came in here poo pooing PM's because you haven't got the balls to hang on to the stuff till it pays back, but here you are cruising and commenting on a PM's site looking for something. Did you think we would all stand up in here and applaud you for making ludicrous comments on the condition of PM's today?
Rate :   5  1Rating :   4
No in fact I was fairly sure I'd get a few crackpots like yourself having a go. Hook line and sinker anybody? I can't say I'm not amused, myself.

LOLs. "New world order" - I threw that out there as one of the more hair-brained "buy gold" themes. If it does happen I doubt a few chunks of yellow metal will make life any easier. Even brave keyboard warriors who had the balls make the commercials richer all the way down the road to ruin may even find life hard too.

After all we know that if society does fall you'll be the first to demand from others in exchange for your PMs what you otherwise could not provide yourself. Keep supplies, build some honest relationships with skilled people and learn some needed skills of your own to provide for yourself and others in fair trade, rather than think of how you can "buy" them.... maybe? Naw that would be too much like real work, right? What we'd really need is a bunch of "smart" "PM loaded" individuals to rise from the ashes and establish a new 1% as soon as possible! Brilliant!

Anyways, yawn.. intellectualise it all you want. Whatever floats your boat. No nerves being hit here... that's what a liberating experience does for you. What are you complaining about anyway? Less metal on the market means higher prices right? In effect I may have saved silver from going that little bit lower. Look, its up a little today.

You have a great Christmas!
Rate :   0  3Rating :   -3
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It will not surprise me to see gold hit $725 now that I have just had a quick glance at a monthly chart. Disclaimer. Currently long physical gold, shares in 2 mining companies (very recently) and short gold in the CFD arena. I will not swap my gold for  Read more
S W. - 12/14/2013 at 6:27 PM GMT
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