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No two bull markets are ever the same, and gold is no exception.
During the last secular gold bull market in the 1970s, gold rose from $35 in 1968 all the way to $200 by late 1974.
Then the unthinkable happened. Between late 1974 and mid-1976, gold prices were cut in half, dropping from about $200 to $100.
At the time, many gold investors sold out in disgust, never to return.
But then a funny thing occurred. Gold prices started to climb again, rising from $100 in mid-1976 all the way to $800 by January 1980.
And anyone who was fortunate enough to own gold at $35 earned better than 20 times their investment in just 12 years.
Twenty-one years later, a new bull market began. Since 2001, gold has consistently performed in what now appears to be a record-setting run.
In fact, since 2001 the average return on gold is now just shy of 18% annually over the last 11 years.
I know of no other major asset that has turned in this kind of performance -- ever. This rise in gold prices is simply unmatched.
This is what a stealth bull market looks like, one that I fully expect will keep powering on.
Now, let's have a look at where gold prices might be headed in 2013...
2013 Gold Price Forecast
Gold began the year at $1,600 an ounce. Should we get average returns in this calendar year as well, gold could finish 2012 around $1,880. At those levels, gold prices would begin 2013 just shy of the all-time high set last year, right around the $1,900 mark.
If we assume an average return again next year, then gold could reach $2,200 or better in 2013. In fact, I believe $2,200 gold is quite likely in 2013.
After all, none of the fundamentals supporting gold prices have gone away. Instead, they've only become even more entrenched.
In fact, here are five factors I've identified that will power the gold bull market upwards for several more years to come.
- The Feverish Growth of Fiat Money: Take a look at this chart. It's a picture that tells you what you need to know about fiat money. As you can see, the U.S. and most of the developed world is printing money much faster than the amount of new gold being brought to the market. Here's the thing: The chart only shows you what was created in an hour. Imagine what the same chart would look like if it were a year. Better yet, how about five years -- or more. The bottom line is that the printing presses are bullish for gold.
- The Feverish Demand For Gold: As central banks continue to print, individuals are continuing to feverishly buy gold, especially in the world's two most populous nations, China and India, which in 2002 accounted for 23% of world gold demand. Today, just these two nations alone make up nearly half of all demand at 47%. This is just the beginning.
- Even Central Banks Are Buying: Central banks, especially in developing nations, are buying and hoarding gold at a breakneck pace. So far in 2012, they've bought 493 tons, already surpassing last year's 457 tons. Many believe this is part of a long-term trend, providing solid support for gold prices in 2013.
- High Demand Meets Short Supply: The other side of the equation is supply. The gold mining industry is struggling to find more gold. According to Barrick Gold Corp.'s (NYSE: ABX) CEO, the industry as a whole spent a record $8 billion in 2011 to explore for gold. And even with such massive resources on the hunt for this precious metal, discoveries are declining. Bloomberg reported that in 1991 there were 11 gold discoveries, yet in 2011 there were only three. Of course, you know what happens when there's an imbalance like this-prices rise.
- My Favorite Reason For $2,200 Gold in 2013: Here's another reason to be bullish: The vast majority of analysts consistently forecast too low and are even predicting declining gold prices farther out. But guess what?... They've been consistently wrong for years. Take a look:
The truth is that signs the yellow metal's bull market will soon end are scarce indeed. Meanwhile, breakeven costs continue to rise among gold producers, meaning the price floor keeps rising.
That's why I expect gold prices to set a new all-time record nominal price in 2013, and to reach the $2,200 level in the process. Smart investors will embrace this trend.
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STILL takes monry to make money country not working thanks to obamaoo he out of touch with the people impesch him now
@Bill: you want to impeach a President whom just got re-elected by the American people? Good luck with that!
Wow, Bill, buddy, your English is appallingly bad. But then again your incredulous comments about Obama indicate that you are likely a Republican, and as such it is you who are out of touch (and in dire need of some English classes). With the English skills you display did they graduate you from elementary school? I'm not trying to be mean or overly insulting, but really, check out your grammer buddy. Anyway, at the pace and the direction the Republicans are going it's going to be a very long time (read 'never') until this country elects another Republican President. Buy yourself a dictionary for Christmas, or better yet, try spell check. Holy cow Bill. I apologize for this coming off as being so mean, I do look forward to more of your comments in the future (if I can decipher them).
As for silver, yes, it's going to have a terrific year even though it is being illegally manipulated by JP Morgan Chase, the Bank of Nova Scotia, HSBC and B of A.
Uh, Damian. It is clear from Edward's comment that he supports Obama. And the incorrect use of "whom" is just what one would expect from an Obama voter. However, Edward is right about one thing — Obama certainly will not be impeached. No; America is going to learn its lesson about electing anti-capitalist presidents the long, slow, difficult, painful way. We'll have another four years of policies which will freeze business expansion and, even worse, lead to severe decline. Keep watching.
Sounds like you are a fan of the eight year period of republican dominated Washington when they inherited a budget surplus from Clinton and proceeded to start 2 wars of choice, costing thousands of a American deaths and hundreds of thousands of injured and maimed.
Not counting the millions killed and injured on the countries attacked.
These geniuses managed , in an 8 year period, to leave the country and President Obama TRILLIONS OF DOLLARS IN DEBT, after being left with a surplus.
Good luck with your type of thinking, if it can be called thinking.
Damian, in criticizing Bill I find it highly ironic that that you misspelled "grammer". You both need English lessons!
hello Damian,
what made you think that way of silver?
Bill = you are still one of those people that blames Obama for EVERYTHING??? Time to wake up and see what's really going on!
Wow, give a person a place to type and all they cn come up is the President. How sad. This is about gold and the value. The President has his own website, so use it and stop being so stressed. Go help Mitt get the money to the people he owes. He lied to them and owes money to millions.
will silver move like gold?
nooooooooooo never its only face value of gold
What about Silver
Silver will be the biggest mover. In time, the most sought after.
do you really think it could be the biggest mover
I think silver is the sleeping giant
Craig
Hey I am selling a ton of gold, does that help anyone? I have not sold it yet. It is only 825 Kilos, so it is shy of a full ton.
I may have a buyer, If you are the owner. Let me know how to contact you…
I am interested. I have a potential buyer.
Now the term Kilo in gold is out it is ounce's there is 35,000 ounce's to a ton do your maths @
$2500 per ounce next year ; =$87,500,000.00 .I know where my money is, paper is in Burn mode gold will always be recycled and increase with time think about your own editors script how much was a ounce in 1970 ah $200.00 mmmmmmmmmm now do you realize what year it is mmmmm 2012 that is 42 years now we are looking at $1780.00 Per ounce, I love the maths if you are 25 years old and not withered mentally buy some gold bars now for safe keeping buy the time you retire at 65years, forget superannuation manage you own wealth in gold this beautiful earths production GOLD now I will not predict the price of gold in 40 years or even 10 years oh did you read this article properly now you see the gods were not wrong and history prevailed
Maybe the market is just a toy for him. Sitting on that kind of wealth, he's not worried about anything. But sometimes the more you have, the more you worry. Why not dump it now ? He's made great gains, especially if any of it was bought for $35, which is a little unlikely it was all bought at that price. Maybe he's a smart investor and his work is finished, time to hang it up and relax. The road's long and hard. Greed can put you over a cliff also.
Given Money Morning's view on gold rising to $2,200 nexr year – i.e. around 25% more than its present price – I'm puzzled why you want to sell 825kgs. You must be a very wealthy man,
who has a view to the Bloomberg forecasters predicting a downturn in near term gold prices?
yes sure 825 kg, that's approx $40 m. And you post about this ?
So as much as you have that gold … I have 234 brand new Alpha Romeos for sale. Would you like to swap some of your gold for 4 wheels … ?
From your mouth to gods ears
how about the prices of silver in 2013? it comes high or low?
I am long the ETF GLL and short March Silver at 34.085 so i do not agree with your forecasts.
Hey John – Not agreeing with this forecast is going to 'cost' you Big Time.
The same for all those who do NOT abide by the real money facts.
Ron Paul explained all his to us when I first learned from him starting over 33 years ago.
The pay back has been handsome and the future even brighter. Do not get caught
holding the old maid aka soon to be worthless fiat, fake, counterfeit, printed on paper
Keynesian Establishment government 'play dough'. IMO
With the re election of Obama and the continued follies of Bernanke and company, the fundamentals supporting higher prices in gold are more firmly in place then ever before.
And yes, where gold goes silver will follow at an even faster pace.
Unlike gold, silver is also a highly sought after industrial metal, that for the most part, once used is gone forever. Couple that with investor demand and the real possibility of a supply shortage will ignite even higher prices for silver.
Let's not forget the fact that the silver price continues to be manipulated by JPM et. al. through massive short positions.
Once the free market law of supply and demand kicks in, and it will sooner rather then later, then watch the price of silver soar.
Thanks to this manipulation we are handed a rare opportunitty to acquire silver at bargain prices.
Find out how to buy at direct dealer cost at: http://www.JohnJCiulla.com
Anyone that can afford it should buy Gold & Silver. Banks as of 1-1-2013 will be using Gold to cover their loans. REMEMBER GOLD DOES NOT GO UP, THE DOLLAR GOES DOWN …..YOU WILL SEE BONDS ARE JUNK… Buy cert. coins as they are sealed & easy to sell. One kilo bars give you the best value.
Bill, while you are calling for impeachment, you really ought to read Craig Unger's just-published book: "Boss Rove" (published by Scribner division of Simon & Schhuster), about a fellow who really needs to be "impeached" (i.e., indicted for Treason).
IRRESITABLE
At what price will the Federal government again prohibit (by Executive Order) the private ownership of most physical gold and require it be exchanged at an unfavorable rate for paper dollars, as was done under FDR in 1933? I would guess $3,000/ ounce but for sure it would happen by $10,000/an ounce, if not before. My guess is they would allow a rush of private individual purchases before moving in for the kill (gold confiscation). In the meantime, you must fork over the current 28% "collectible" tax if you sell gold at a profit.
There is no way that our carnal politicans would forever ignore a new source of previously untapped physical gold if prices go high enough. Its got to be only a matter of time because greed always wins out. So, if you buy and hold gold rather than trade it, then you need to consider the safest place to store it. U.S. BANKS "safety" deposit boxes would not be it. Banks are required to enforce any Federal laws or orders pertaining to money or gold.
When the Fed Govt banned the ownership of physical gold in the 30's, only 20% was recovered. Far less people own the physical now days, most only own digits of debt on their credit cards.
Debt the slavery of the free
could enybody tell me when to off load my silver
There has been about 5 billion ozs. of tradeable gold for over 20 yrs. 20-25 yrs. ago there was 12 billion ozs. of tradeable silver. Today, I have heard anywhere from 800 mil to 3 billion ozs. of tradeable silver is all that is left. 1/2 as much as gold. Industry is eating it up in ways that are non-recoverable. It does not take a PHD to decide which is the better investment.
I doubt the numbers you quoted. Less physical silver than gold ? Come on …
Gold is ascallating in price and it will continue to rise. All investto incrrase wralth. ors need to take that opportunity wisely
will the price of gold have anything to do with the price of oil?
No N O
Please include me in your mailing list.
I can perhaps contribute some news on gold trading in Malaysia.
Regards,
Michal
Hi, I am interested in buying gold (not mining shares), but do not know how – maybe coins???
Can anyone advise.
Thanks
RC
There are a number of reputable sellers of gold and silver. I use APMEX.
Try kitco.com…APMEX is way too much premium.
Dear Peter,
do you study this article?
http://www.paulvaneeden.com/Gold
Pete, is is just us Brits that spell grammar with an 'a' ? and Pete, if monry makes money I'd like to know where I can get some. You're priceless dude.
There are a number of reputable sellers of gold and silver that I do use it a lot.
will gold continue to rise ?
first down then up. 1674 is the line.
Hey,would any of you fill me in on the time Clinton and Timothy Geithner as secretary of treasury-hey,did I spell that right??hauled alot of the gold bars out of Fort Knox and replaced it with Gold plated bars with tungsten in the middle??I want to know how these crooks got away with this.These actual fake bars were discovered I think in China..its hard to believe this actually happened but Ive always heard that politicians are crooks and they want every one else to obey the law??Just think of what the IRS would do to us if we cheated them out of $100 of their tax money!!!!
I am NOT a big believer of buying and / or , Hoarding GOLD. When the market shows indications of a rise? I will sell my Gold. When Both Silver and Gold drop? I will await the start of a rise? And HOARD all the silver my pocket can afford. And then probably 10% more.
Silver has ALWAYS been the BEST investment. Gold? Costs to much, and when it drops 10 % ? You lose a ton of money. But when Silver drops 10 % ? It is always covered by the comfort zone.( the profit margin from the rise )
So, In My outright, uneducated opinion? Since 1979 I have been preaching and writing papers on the best investment between the two metals. Hands down? ALWAYS SILVER