Gold and silver have been exceptionally weak this year.
Gold is now down 6 months in a row!
From a short term perspective, this is about as bad as it gets for gold (historically).
But here’s a very important point that I want to illustrate. Commercial hedgers are now long gold for the first time since 2000. (Gold began a massive bull market after 2000).
Some people see this as a long term bullish sign for gold. I don’t. Commercial hedgers were CONSISTENTLY long gold during the 1990s while gold swung sideways in a big range. Gold and silver are increasingly showing signs that are characteristic of these long sideways consolidation patterns.
- Gold’s short term outlook is bullish.
- Gold’s long term outlook is a 50-50 bet.
Here’s another interesting point. Look at the dates from this study. While the U.S. economy was typically in the late-stages of its economic expansion cycle, inflation didn’t go up significantly over the next year.
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