Gold’s Next Spike

This is a syndicated repost courtesy of The Daily Reckoning. To view original, click here. Reposted with permission.
Is the latest gold rally for real?
Investors can be forgiven for asking that question. Gold reached an all-time high dollar price of $1,898 per ounce on September 5, 2011. Then it began a relentless four-year, 43% plunge that took it to $1,058 on November 27, 2015.
Of course, gold did not go down in a straight line. There were numerous strong rallies along the way.
Gold rallied 13%, from $1,571 in June 2012 to $1,780 in October 2012. Then gold rallied 15%, from $1,202 in December 2013 to $1,381 on March 2014. Gold rallied 22.5% again, from $1,058 in November 2015 to $1,366 in July 2016, just after the Brexit vote in the UK.
If you were fortunate enough to buy each dip and sell at each high, lucky you. I don’t know anyone who actually did that. More common behavior is to buy near the interim tops on euphoria, and sell at the interim lows on depression. That’s a great way to lose money, but unfortunately it’s exactly how many investors behave.

This post was published at Wall Street Examiner by James Rickards ‘ May 30, 2017.