Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Canadian Cannabis Stocks CRASH as Canopy Growth Hits a Dead End - 14th Dec 19
Retail Sector Isn’t Dead, and These 6% Dividend Paying Stocks Prove It - 14th Dec 19
Top 5 Ways to Add Value to Your Home - 14th Dec 19
Beware Gold Stocks Downside - 13th Dec 19
Fed Says No Interest Rate Hikes In 2020. What About Gold? - 13th Dec 19
The ABC’s of Fiat Money - 13th Dec 19
Why Jo Swinson and the Lib Dems LOST Seats General Election 2019 - Sheffiled Hallam Result - 13th Dec 19
UK General Election 2019 BBC Exit Poll Forecast Accuracy Analysis - 12th Dec 19
Technical Analysis Update: Tadawul All Share Index (TASI) - Saudi Arabia ETF (KSA) - 12th Dec 19
Silver Miners Pinpoint the Precious Metals’ Outlook - 12th Dec 19
How Google Has Become the Worlds Biggest Travel Company - 12th Dec 19
UK Election Seats Forecasts - Tories 326, Labour 241, SNP 40, Lib Dems 17 - 12th Dec 19
UK General Election 2019 Final Seats Per Party Forecast - 12th Dec 19
What UK CPI, RPI INFLATION Forecasts for General Election Result 2019 - 11th Dec 19
Gold ETF Holdings Surge… But Do They Actually Hold Gold? - 11th Dec 19
Gold, Silver Reversals, Lower Prices and Our Precious Profits - 11th Dec 19
Opinion Pollsters, YouGov MRP General Election 2019 Result Seats Forecast - 11th Dec 19
UK General Election Tory and Labour Marginal Seats Analysis, Implied Forecast 2019 - 11th Dec 19
UK General Election 2019 - Tory Seats Forecast Based on GDP Growth - 11th Dec 19
YouGov's MRP Poll Final Tory Seats Forecast Revised Down From 359 to 338, Possibly Lower? - 10th Dec 19
What UK Economy (Average Earnings) Predicts for General Election Results 2019 - 10th Dec 19
Labour vs Tory Manifesto's UK General Election Parliamentary Seats Forecast 2019 - 10th Dec 19
Lumber is about to rally and how to play it with this ETF - 10th Dec 19
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19

Market Oracle FREE Newsletter

UK General Election Forecast 2019

How High Will Gold Go?

Commodities / Gold and Silver 2017 Dec 05, 2017 - 03:31 PM GMT

By: Harry_Dent

Commodities No. I’m not flip-flopping!

As I told subscribers to our Boom & Bust monthly newsletter in November, I stand by my forecast that gold must still lose about 65% of its current value before we hit the bottom of this latest commodity cycle, around 2020 or 2023. And when the markets unravel, as they must, gold will tumble, just like it did in 2008. It’s NOT a safe haven in a deflationary environment, like it is in an inflationary one!


But I also told them that after this cycle has wrapped up and we head into the upward swing of the next one, then gold will soar, along with several other very specific commodities.

The next iteration of this cycle just ahead should prove to be the biggest boom in commodities yet.

There’s a trick to this though…

The general commodity index (CRB) has one of the most clockwork-like cycles I’ve ever seen. It’s a full cycle of 30 years. But, the commodities within that index don’t cycle as smoothly, some presenting much more up and downside potential than the broader index.

Also, the overarching cycle is much more consistent on the upside than the downside. The tops we saw in 1920, 1949 to 1951, 1980, and 2008 to 2011 are very consistent, right at that 30-year mark, give or take a year.

The bottoms are more variable.

After the 1920 top, commodities bottomed in 1933, trending down for 13 years. However, after the 1951 top, the index only bottomed again in 1968 – 17 years later! And after the 1980 peak, commodities took 21 years to bottom out, although most of the losses occurred into 1986. The first six years of that downward leg of the cycle were brutal before prices wafted more sideways and a bit farther down until 2001.

Despite all of that, the commodities cycle is one of the most reliable in my arsenal. It really doesn’t get better than this on its longer-term cycle for peaks. See for yourself…

The dual 2008/2011 peaks led this commodity bubble burst around the world and looks close to a bottom in the years ahead.

The first peak in mid-2008 was driven mostly by energy, industrial metals, and agriculture. The second peak in early 2011 was thanks mostly to precious metals and some industrial metals like iron ore or copper.

While gold has not yet hit my next target of near $700 an ounce (range of $650 to $750) – and mark my words, it will – I do believe we’re reaching the end of the commodities downturn, which will wrap up likely by early 2020 and by 2023 at the latest. The biggest clue is the 80% crash in crude oil and iron ore.

2023 is the most natural bottom from a 2008 peak, forming a 15-year down cycle. But we may see some signs of new life earlier because this downturn has been so extreme thus far… and because the demographic force of emerging countries will directly impact commodities. They will likely turn up sooner than major developed countries like the U.S.

Regardless, a major commodity boom is set to start between 2020 and 2023, and will run into 2038 to 2040. And, from all indications, it’ll be a major boom. I’m talking as much as 4.8 times, which is bigger even than the largest bubble since the late 1800s into 1980, that clocked in at 3.15 times.

Gold bugs are right. We may well see $5,000 per ounce, but only during the next commodity boom. First gold has some excess weight to shed.

A Warning

Commodities have the most extreme of cycles. That’s why the best traders make their hay in this sector. Sudden changes in weather, or natural disasters like hurricanes or fires, or mining strikes can cause sharp short-term fluctuations, often like an exploding bomb!

That’s why I suggest that you don’t trade alone in this volatile arena. Find someone with a proven system to help guide you.

And here at Boom & Bust we’ll point you in the right direction using my decades of cycles’ analysis and research into demographics and urbanization trends… and Charles’ expertise in value investing!

There are particular commodities that perform best in a world driven more by the fast-growing and urbanizing emerging countries. And that driver really is the key to the next commodities boom.

Although most commodities, from agriculture to energy, go up and down in longer-term, 30-year cycles, there are differences in our ability to ramp up supply (elasticity) when demand accelerates.

It’s easier (and cheaper) to cultivate more land for crops or livestock than it is to drill deeper wells for oil or dig deeper mines to extract the industrial metals like iron ore, coal, lead, nickel, or copper.

So, as the emerging world dominates growth in the next global boom, it will require more basic commodities like rice and corn and rubber. But precious metals, industrial metals, and energy will also have a place.

The best way to forecast such future needs and appreciation potential is to see how different commodities performed in the last commodity cycle boom from around 2001 into 2008/2011.

For the full analysis, and to see the seven other commodities we’re betting on in the next boom, become a Boom & Bust subscriber today.

Harry

http://economyandmarkets.com

Follow me on Twitter @HarryDentjr

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.

Copyright © 2017 Harry Dent- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Harry Dent Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules