Is This A Gold And Silver Bear Market Or A Correction In A Secular Uptrend?

Does the following contrast sound familiar to you? Mainstream media headlines, mostly based on either mainstream economists or large financial institutions, report continuously how weak the precious metals market is; they hasten to remember readers how the bull market had burst in 2011 and that much lower prices are just around the corner. In their view, after peaking in 2011, gold and silver are in a clear bear market. On the other hand, writers and analysts that are non-mainstream (most of them non-Keynesian) consider today’s gold and silver market as a long correction in a gigantic secular uptrend; they expect (much) higher prices in the years to come. The interesting thing is that everyone is looking at the same data and charts.
The key question is whether the gold market is correcting in a secular trend or the bear market is here to stay(till the next cycle starts).
In order to answer that question, the team at ShortSideOfLong did an excellent job comparing the ongoing correction in gold and silver with previous corrections. Based on purely chart observations it seems feasible (with a high probability) to come to a reliable answer. One should note that the data in the following two charts come from the period after 1971, as that was the year when gold started to trade in a ‘free market’ (after US President Nixon closed the gold window on August 16th 1971).
The first chart shows different gold bear markets since 1971. The conclusions from the chart come from the analysts at ShortSideOfLong:

This post was published at GoldSilverWorlds on August 23, 2014