Friday , 28 October 2016

UBS: It’s Time To Buy Gold – Here’s Why

UBS has warned that the seven-year cycle in equities is rolling over, we could seegold rising a sharp 30% correction in stocks and that as per the headline of their ‘Technical Outlook 2016′, it is time to “buy gold”.

By Mark O’Byrne (


Analysts Michael Riesner and Marc Müller believe the bear market that has dominated the price of gold since 2011 is nearing a bottom, with the “basis for the next multi-year bull market” now taking hold:

“Gold has been trading in a cyclical bear market since 2011. In 2016, we expect gold and gold mines moving into an 8-year cycle bottom as the basis for the next multi-year bull market. Initially, we see gold profiting as a safe haven and as of 2017 [with] gold profiting from the U.S. dollar moving in a major top and starting a bear market.”

“In contrast to the underlying secular trend in commodities (which has turned bearish) we see gold (which is in our view a currency and not a commodity) still trading in a secular bull market.

Pattern wise we continue to see the 2011/2016 cyclical bear market in the same context as the 1975/1976 bear cycle in gold. Keep in mind, in the mid-70s gold lost 43% of its value from its January 1975 top before another gold bull market started into the January 1980 bubble peak. It is amazing to see that with a loss of 45% from its August 2011 top into the early December 2015 low, the decline in gold has more or less exactly the same proportion as in the mid-70s.

Furthermore, there are still a lot of market commentators who say that the August 2011 top in gold was the top of a bubble. According to the average gains we have seen in historical financial bubbles, the gold bull run from 2001 into 2011 (760%) was far away from any bubble territory.

  • In the first gold bubble, gold gained 2400%.
  • In the 1903 to 1929 Dow bubble, the Dow Jones Industrial gained 1200%.
  • The 1979-1989 Nikkei bubble came in at around 2000% and
  • the 1980 – 2000 Nasdaq bubble topped out a +3900%.

so if gold moves into a bubble, we would need to see a gold price of minimum $3,300, and in this case we would still talk about a low bubble phenomena such as the 1903 – 1929 Dow Jones bubble!!”

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[The original post by Marc O’Byrne ( is presented here by the editorial team of (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample heresign up in the top right corner) in a slightly edited ([ ]) and/or abridged (…) format to provide a fast and easy read.]

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