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Studies reveal that gold has been in a Supercycle since 2001 - Part 1

Commentaries & Views

In 1913 and 1924 Dutch economists Jacob van Gelderen and Salomon de Wolff speculated the existence of 50 to 60-year cycles in the financial markets.  In 1925 the Soviet economist named Nikolai Dmitriyevich Kondratie speculated that a multi-decade business cycle existed. He called it a “Kondratiev wave”.

In the 1950s R N.  Elliott also speculated that there are long financial cycles that he labeled Supercycle’s. His largest cycle was named a Grand Supercycle which can span 60 years per wave and below that a Supercycle wave which would span 10 to 15 years.

According to Motley Fool, “A Supercycle is defined as a sustained period of expansion, usually driven by robust growth in demand for products and services. Economic Supercycle’s tend to produce strong, sustained demand for raw and manufactured materials, such as metals and plastic, that exceeds what commodity producers can supply. Supercycle’s, which are also good for stock prices, are often associated with long-term periods of growth for the commodity markets.”

The last major Supercycle for gold occurred at the beginning of the 21st century. In 2001 an ounce of gold was priced at approximately $200. By the middle of 2011, gold hit a new record high above $1900 an ounce. In a short time of just over 10 years, gold increased by 800% in value. This illustrates the true definition of a commodity in a Supercycle.

Our technical studies indicate that gold has continued this Supercycle up to current pricing with a major bull cycle beginning at the end of 2015. We published our studies and found in 2016 in technical analysis of Stocks & Commodities V. 38:04 (38–41, 43): the article was titled “Gold’s Super Cycle” by Gary S. Wagner and Joseph M. Wagner II.

Our most current technical studies indicate that this bullish impulse wave is part of a Supercycle that will not conclude for years. More importantly this wave could take gold to $2700 per ounce or higher. In tomorrow’s column, we will present those findings and the technical studies we use to reach that conclusion.

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Wishing you as always good trading,

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.