War Cycles and The Price of Gold

There are many fundamental factors which contribute to the price valuation given to gold at any time. At the same time gold is valued by reference to it's comparative efficacy to other assets as: a non national (foreign) currency, a zero coupon AAA (and better) bond type asset, an inflation hedge, a hedge against systemic risk as per eg collapse or loss during war or catastrophe.

So I got to thinking that it might be interesting to look at repeating alleged cycles in the frequency and size of wars, and interpret those cycles by looking at the behaviour of the gold market during those historic times. So hopefully for every war cycle there would hopefully be a similar lead up period, and some similarity during it's crest and decline of current waves when compared with earlier waves of that particular war cycle.

The (alleged) war cycles I chose to work with are the following:

142 years

57 years

22 1/2 years

12 1/4 / 9.6 years (either one or the other dominates)

11 1/2 years

The 12 year cycle seems to be subdued during recent years so for this one I worked with the 9.6 year wave which seems to increase when those two are not in contest with each other.

So the cycles I worked with, and the date in the past corresponding with today (August 2014) are as follows:

142 years ... charts not available and difficult to compare with today

57 years ... 1957

22 1/2 years ... Jan 1992

11 1/2 years ... Jan 2003

9.6 years  ... Jan 2005

It's interesting to see that August this year should be compared to January of the previous waves for three of these (war) cycles in the gold price. This may have repercussions to the reliability of seasonal charts and their predictions during the latter half of 2014. Subject to the approximate dimensions of these long term waves of course.

I considered looking into gold against logarithmic demographics, as in Secular Cycles and Millennial Trends by Korotayev,  Malkov, and Khaltourina ( http://escholarship.org/uc/item/9c96x0p1#page-1 ) but the timescale is just too long for practical use, though the idea fascinates.

So I took the most well researched international war cycles instead and began to see what elements of the previous wave might be repeating, in modified modern form) this time round. If the act of war or the threat of war affects the price of gold, then looking at the same stage of a previous war cycle should hopefully compare in some way to the present price, provided the periods measured are an exact whole (complete) number of cycle waves apart.

The farther back in time I went the more I have used comparisons rather than absolute value prices - ratio with other markets, and logarithmic display, detrending against in inflation index to normalize data and make it "look similar". As they come into recent years I just compared the price of gold then with the price now.

57 Year war cycle last time round looking first at the price of stocks

Courtesy of www.macrotrends.net: Gold - inflation adjusted against CPI

Observation: In both cases a large trading range is nearing or at completion with stocks attacking new highs.

57 year war cycle last time (looking in gold price vs stocks):

Courtesy of www.macrotrends.net: Gold against S&P 500

Observation: the stocks to gold ratio is presently at a similar level at it was at this stage of the last wave.  Last time the ratio was clearly declining, but this time the recent rally is large enough to make me question whether this is similar or different.  The case remains open on that.

 22 1/2 year war cycle last time round in gold price:

Gold price against itself

Observation: This is extremely interesting. A declining downtrend of a mature near swing in gold in both charts!

11 1/4 year war cycle last time round in gold price:

Gold price against itself

Observation: In this timeframe gold has made a historic low causing a major bull to begin. This time round the low is several smaller swings later, and although a breakout may be forming like it did a decade ago, the major low is not present for such a length of time as to gain recognition and "bring in bulls" as it did back then.

9.6 year war cycle last time round in gold price

Gold price against itself

Observation: Similarity abounds, and many of the smaller swings seem to be synchronized! Following this "analog" would entail construction of a new higher support plateau from which a bull could gain strength and then make a continuation of more bullish upwards swings.

The similarities are visually obvious if they exist, or if not visibly obvious are probably non existent. I personally see a series of pending breakouts in past waves when those waves were at a similar stage to today. But allowances must be made and a months or two are neither here nor there in such a basic approach. readers might be interested to try this for themselves, but with shorter term cycles in war or other assets like eg bonds whose prices are encapsulated in the price of gold.

I did find it interesting to remember the major news headline events of those past times and compare with the hottest fresh news of 2014. but that is a different conversation. That aspect is also worth looking into I think.


Sources of related material:

Martin Armstrong on Cycles of War:


Larry Edelson on War Cycles:


Dewey - "Cycles" : http://www.bibliotecapleyades.net/ciencia/cycles/cycles11.htm

Some of Mr Dewey's published work has been used in the charts I have created for this contribution.


Have a great weekend everybody!

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.


Danforth Coxwell's picture

JUst want to mention again......

The best way to protect yourself against the spread of infectious disease, including Ebola, is to wash your hands. Contact your local Public Health Department for more details.

Yes a first.......

sierra skier's picture

Analysis comparrison

Must be those clean hands. 2nd

This will be a fun read.

Everything revolves in cycles from women's hemlines and men's ties to commodities and politics (wars). A large part of this is those in charge creating the circuses to keep the public occupied so as to be non-concerned with the economic and loss of freedom for more security issues. I just hope the cycle for PMs will come around one of these days so I look better in my wife's view.

argentus maximus's picture

A real question of course is:

A real question of course is: does war account for what percentage of the value given to gold?

I don't think the answer is a constant percentage. Instead I am intuitively convinced that when war is "high" other fundamentals will get forgotten and ignored for a while, and vice versa. Such is sentiment.

sierra skier's picture

War is often used as a cover

for the poor economic conditions as a distraction so I think that wars often come as a result of poor economic times when PMs should be up in value.

lnardozi's picture

Good God, Y'all

What is it good for?

Absolutely nothin'.


Green Lantern's picture

Some more Cycles and Economics

Here's one more guy comparing war cycles and financial cycles

Part 1 of Is War Predictable?   It's ok but not indepth as it could be with cycles

The next guy is actually pretty good and has all the Dewey cycles.  Wish I had that book he shows.  Video's aren't very well done but he has good information.  Sometimes people making interesting comments in the youtube comment section.  Looking at the next few years between now and 2017 for STHTF

amarula4's picture

Belangp explains gold/silver market manipulation

Know your opponent

Chuck Diesel's picture

OT: the other side of the Ferguson story

I'm sorry for inserting this into the thread, but being from St. Louis, I feel compelled to offer it up. This allegedly is a family friend of Darren Wilson who called into a very popular morning talk show here on Friday. She called in to offer Darren's side of what happened. Obviously there is no way to prove what she's saying, but , if true, it certainly casts a lot of doubt on what we've been hearing.  


DayStar's picture

Harvey's Up! (TFMR)

Harvey's Up! http://www.tfmetalsreport.com/comment/424974#comment-424974

  • Dave Kranzler: The attack On Gold/Silver this morning was nothing but shock and awe. Today's metals plunge was a pure psychological warfare operation on the metals. I received several emails and phone calls from clients and colleagues who were in a panic. My response was:  “It’s a mid-August Friday, the rest of the world is at happy hour or in bed. Most of the big players in this country are at the beach. India was closed last night for their Independence Day, which put a lot less demand-stress on the physical market. Something really ugly is developing behind the scenes that is not apparent yet and that’s why they smashed gold during the one of the most quiet trading periods of the year. There was absolutely no news events that would have triggered the sudden selling of silver in huge quantities. As I write this, a little over 40,000 September silver contracts have traded since the Globex electronic session opened yesterday at 6:00 p.m. EST. Why? The reason the metals were slaughtered temporarily is that U.S. knew well ahead of time that Ukraine would start bombing the Russian humanitarian convoy. How do we know? The Ukrainian military doesn’t even [pass gas] without U.S. permission. They bombed the metals because they wanted the spike up that would occur when the attack news hit the tape to start from a lower level. And they wanted to scare potential buyers away from the market to take steam out of the market when the bombing began.
  • Mark O'Byrne: Nobody really knows how this new CME auction system works, how it’s coded, who programmed it, and how the prices are really set. Also, nobody seems to know how the new system is administered and governed and how interested 3rd parties in the market can see the auction in action without signing up to a proprietary Thomson Reuters system. GATA will say the LBMA and the western bullion banks are engaged in a rebranding and repackaging exercise in order to maintain a cosy gold and silver cartel of bullion banks and ultimately control over precious metal prices. The process to obtain "market consensus was supported by an “independent review” of the seven short listed companies by Jonathan Spall of G Cubed Metals Ltd and Daniel Plunkett. This is the same Jonathan Spall who was a director of the London Gold Market Fixing Company until earlier this year, and who worked on the precious metals trading desk in Barclays commodities division in London until earlier this year, alongside precious metals trader Daniel Plunkett, and head of gold spot trading Marc Weber at Barclays. Plunkett, it will be recalled, was fined by the FCA in May 2014 for manipulating the London gold price fixing process in 2012, and struck off the FSA Register, and also caused Barclays to be substantially fined. Weber departed Barclays abruptly earlier this year. Barclays has the distinction of being the only bullion bank to have been fined by the FCA for gold market manipulation, and Plunkett has the dubious distinction of being the only gold trader in London to have been fined for manipulation of the gold price fixing. 
  • Alasdair Macleod: There can be no escape from the dollar as the currency standard, because of the dollar's role in backing all global fiat currencies. So, the world can trade in rubles or yuan, but the ruble and the yuan derive their value from the dollar. The risk of a new currency crisis has been dramatically increased by the major central banks acting to maintain financial asset values, particularly in bond and stock markets by printing and spending vast quantities of fiat. This transfers risk from investment assets into the currencies themselves, something that is certain to become evident in the event of a rise in interest rates. For example a 10% fall in over-valued sovereign bond prices could easily threaten the survival of some systemically important banks, triggering a new financial crisis. Obviously, this cannot be allowed to occur and there can be little doubt that the central bank response will be to flood the financial system with yet more money. 
  • Harvey: Yesterday, the gold and silver equity shares were weak compared to the price action of the metal. Probably this is the bankers signal that a raid on gold and silver metal was on for the following day. Gold and silver were hit pretty hard early in the session, with gold falling to $1292 and silver to $19.42. Then word came from the Ukrainians that they had destroyed a "Russian armoured vehicle convoy" and that sent gold and silver northbound. The bankers calmed things down after gold rebounded to $1307 and 19.75. The big story of the day is the propaganda surrounding a supposed shooting of a infiltrating Russian military convoy. The Ukrainians went on the air to announce the attack, whereas Russia stated that Russian military vehicles did not cross into the Ukraine, only the humanitarian trucks. Ebola cases continues to rise. In the USA two reports were very disturbing: i) the U. of Michigan confidence report and it was hugely disappointing and ii) the NY Empire manufacturing index also showed a big miss. 
  • Bill Holter: Thursday, Vladimir Putin made the comments "Russia should aim to sell its oil and gas for roubles globally because the dollar monopoly in energy trade was damaging Russia's economy"... and ..."At the moment we are trying to agree with some countries to trade in national currencies". If this were 10 or 20 years ago, his comments would be laughable. Fast forward to present day, his comments are not laughable at all, they are the words of outright WAR! Economic weakness is sweeping Europe again, what will they do? Most every and all policy bullets were already fired to emerge from the 2007-09 meltdown, what is left? It cannot be more fiscal stimulus as we went through 2012 and 2013 watching country after country go to and far through 100% of debt to GDP ratios, almost no room left here. No, the only thing left is monetary stimulus and outright debasement. 
  • Tyler Durden: When it comes to Chinese (or any other in these centrally-planned, fabricated days) economic data, there is GDP and then there is reality. And as the current premier of China himself has admitted, there is no more accurate indicator of real, not bull**** "growth", than China's monthly power consumption. It is here that another rather massive divergence from China's official data (which has the world believe China GDP rose 7.5% in Q2) has appeared. According to Economic Information Daily, power consumption in Shanghai and Jiangsu fell by more than 10% y/y in July, compared with double-digit growth a year ago, sources said. And it gets worse: other provinces, including Zhejiang, Anhui, Hubei, Hunan and Guizhou, reported a power consumption declines of up to 22 percentage points. One could almost say the Ukraine ministry of YouTube clips has been put in charge of China's GDP calculation.
  • Zero Hedge: Is it any wonder that both the WHO and Doctors Without Borders appear in full panic mode, explaining that the outbreak is "moving faster" than they can manage it? As WHO reports, the death toll in West Africa has jumped to 1,145 (2,127 infections) with 76 new deaths in the last 2 days and a record-breaking pace of reported new cases (152 in the last 2 days).
  • Harvey: The New York Manufacturing index tumbles the most in 2 years and also we had its biggest miss in 4 months. In a nutshell, the economy is imploding exponentially. 
  • Zero Hedge: For a long time now, we have been enjoying a period of relative economic stability even though our underlying economic fundamentals continue to get even worse. Unfortunately, there are now a bunch of signs that this period of relative stability is about to end. The following are 14 reasons why the U.S. economy's bubble of false prosperity may be about to burst...
  • #1 The U.S. junk bond market just experienced "a 6-sigma event" earlier this month. In other words, it is an event that is only supposed to have a chance of 1 in 500 million of happening. Billions of dollars are being pulled out of junk bonds right now, and that has some analysts wondering if a financial crash is right around the corner.
  • #12 As a result of the conflict in Ukraine, the United States, Canada and the European Union have slapped sanctions on Russia. In return, Russia has slapped sanctions on them. Will this slowdown in global trade significantly harm the U.S. economy?
  • Greg Hunter on Ferguson, MO: Ferguson, Missouri, has simmered down after riots and looting because of the police shooting death of an unarmed teen. Journalists were arrested and shot at with tear gas. The President asked for calm while a full investigation is underway. There is much more going on than the awful shooting of a teen. Shooting deaths in Chicago are common place. 14 shooting deaths have happened, so far, in August alone. Military style force was rolled out to combat the rioters, and now, Missouri Governor Jay Nixon has put the Highway Patrol in charge and pulled back from the military style confrontation. The big picture is the government, on multiple levels, is preparing for social unrest. I think they are scared to death of what will happen in the next financial calamity. Look at the YouTube video of the stores that were robbed and vandalized. The people who worked in the burned out stores are not working. Products are not being sold. Taxes are not being collected. Now, multiply that times a million, and you could have a collapse of civilization as we know it. That’s why I think there has been a push to militarize the police. 

All this and more on...

The Harvey Report! sad



Green Lantern's picture

What is it good

What is it good for?

Absolutely nothin'.


It's really a very arrogant and dismissing statement considering (you correct me if I am wrong) you have zero clue of the implication of this work, where it comes from, who uses it or even it's implications on a more popular subject that people love to talk about manipulation.   The people that run the show have this technology, spent probably billions of dollars in research to gather every piece of information they could on how cycles work together AND that's why they are ahead of the game, and you aren't.  

I doubt you have the least bit inclination to look for the deeper analogs AM hints at the end of his article which probably done with the utmost of diligence would yield more than you could ever imagine. 

You would dismiss the work and insult the author who by the way if you follow his thread know that he has a track record at the future direction of the metals as good or better than any of the luminaries (possible because he considers information that 90% summarily dismiss) in the field and he gives his time and effort for free and in a few key strokes of being a smart ass you dismiss it.  Instead you might want to just move on and find something that perks your interest that you can wrap your brain around. 

Might be a useful exercise to have gold drop below $1000 for one last hurrah to bring sentiment down to near zippo so the rest of us who have a keen interest in markets will benefit from the inevitable upward movement that your disinterest will yield.   From the looks of things, we are getting close. 

Would love for Turd to give you a chance to write a guest post and see what deep profound truths you could provide to the community. 

thesandbox's picture

the Hall of Justice...

has spoken......thanks GL.

I Run Bartertown's picture


Didn't he just mean the song?

Shouldn't you have gotten that?wink

Green Lantern's picture

I got that reference

I got that reference Bartertown.  I owned the 8 track of the Temptations version.    If he was not aware that the context of his statement might have other meanings and ways to be construed (ya think?), he should have typed another 3 or four words or quoted Shakespeare.  But he got top four.  That's what counts. 

buzlightening's picture

argentus maximus

Don't always post on every commentary.  I do read all, hit the audio, if present, and digest the range of intuitive insight.  Presentation of what can be dug out of decades of sand building on the beach of the market front simply amazes me here at TF Metals.  Nice to come here and enjoy the talent to shared here to bolster and assist us all in taking on the EEE.  Contrary to buying into all the kool aid served up, with candy coated dreams of prosperity in debt accumulation by the EEE, nice to know you're not alone.  Sometimes I can't lay out what I feel but I know if I come to TF Metals there will be someone who has the research skills and presentation to say hey look and see what I've dug up.  The digging doesn't always reveal immediate pay dirt; the mother load or come to any other conclusion than this is what the facts say, as far as the facts can be presented.  Many shovels of dirt by many here to unearth the truth.  Fiat debt based currency is a crap storm waiting to be unleashed upon the public domain by self consumed megalomaniacs; stroked by so many additional megalomaniacs, to verify the depth of the bullshit of deceit, in burying all human common sense.  An insane convoluted flying half tangle of psycho babblers, having no conscience of rational thought or moral action for good.  Done in such black darkness, as light of truth, is to good for the power which moves men and peoples to only one final conclusion.  DESTRUCTION! SELF DESTRUCTION OR COLLECTIVE DESTRUCTION; ONE POWER EVIL PRODUCES IN PROLIFIC PROPORTIONS THESE DAZE.  EVIL IS THE SINGULAR POWER OF DESTRUCTION AND THOSE WHO GLORY IN IT HAVE THIS ONE END.  

Turd Ferguson's picture

Thanks, AM


Good stuff!

flyinkel's picture


Another namby pamby hyper-sensitive GL lecture.  Apparently everyone else "got it" but GL.  He wasn't commenting on AM's talents, but on the topic itself.  Ever consider a PM or do you always praise in private and reprimand in public?

Actually Inardozi you got off easy....standing by for full fledged temper tantrum.

stackaloha's picture

Good God y'all

I too am surprised GL didn't get the reference...

and a Vancouver punk rock version:

it only takes away...

say it again!

I'm a bit surprised that you received 6 hat tips for the rant wink

Thanks again AM!

I Run Bartertown's picture


"I'm a bit surprised that you received 6 hat tips for the rant"

More and more liberals here lately...

They're perpetually indignant and angry about...um, everything and ...well whatever...who really cares?

agNau's picture

Wow, what a day.

Just the way I called it.
Feel so good. I took a nice long bath, did my nails, and picked my nice pink faux leather vest. Because I just felt so pretty. Spent the day accessories shopping....only window shopping, because Copper says the dollar is headed higher....which is tragic for those stackers. 
Unfortunately they will have to pay less now for their silver.
Can't wait to get home and tell mom about my day!


stackaloha's picture

Turd interview

Interview with TF on Greg Hunter just popped up on my youtube subscriptions:

I just began listening...

SS121's picture


d  e  l  e  t  i  n  g








SS121's picture

Silver and Gold in Monetary Cycles

Currently the 'system' of fake charts/markets/exchanges are acting as the monetary substitute.  Just as individual fiat currencies did in times past.

And now the 'system' is on it's last legs.

start getting excited when you see a manufactured crisis and hear talk of replacing the USD as the currency standard (h/t to A.M.)

then when the silver chart is no longer the single price reference for the world's physical Silver transactions..."Booyah", it's over!  Monetary Cycle complete,

Silver and Gold become the de facto global benchmark for currency valuation, ...dust off the guillotines.

'til then.... stackity stack   wink

lakedweller2's picture

TF on Watchdog

Great job!!

Safety Dan's picture

From DayStar's Harvey's post above...

Does this have anyone but me concerned?

Harvey: The New York Manufacturing index tumbles the most in 2 years and also we had its biggest miss in 4 months. In a nutshell, the economy is imploding exponentially.

Zero Hedge: For a long time now, we have been enjoying a period of relative economic stability even though our underlying economic fundamentals continue to get even worse. Unfortunately, there are now a bunch of signs that this period of relative stability is about to end. The following are 14 reasons why the U.S. economy's bubble of false prosperity may be about to burst...

#1 The U.S. junk bond market just experienced "a 6-sigma event" earlier this month. In other words, it is an event that is only supposed to have a chance of 1 in 500 million of happening. Billions of dollars are being pulled out of junk bonds right now, and that has some analysts wondering if a financial crash is right around the corner.

Safety Dan's picture

@ AM Thank you for Cycles of War & Gold Price

Thank you for another great article. Others please note what the gold price did when war broke out in Iraq, March 20th of 2003.  We completed troop withdrawal in Dec of 2011.

Has anyone thought about gold vs GDP, per country and how that might affect standing? See this link for a historical view of the amount of gold in tons vs GDP. http://knoema.com/vgvzhec/gold-reserves-gdp

Note at the bottom the OECD and High Income ratios. What is China's ratio with its hidden tonnage of gold? I would guess about 2.7.  What about the G7 or G10 or G20? Would the higher ratios give the country more influence in the coming reform? If it does the Eurozone's 4.6% appears much more stable than the North America at 2.274%. 

We have gone from about 800 billion in 2008 to over 4 trillion in 2014 and still printing. This will eventually affect the GDP and has already affected the M2 velocity. Still the Feds print in a zirp environment in hopes inflation will take hold as its easier to control and benefits the government and the 1%.

I suggest gold reserves vs GDP will be the next important ratio to measure an economy by. 

Dark Horse's picture

Refugee convoy hit by rocket fire in East Ukraine

lnardozi's picture

@Green Lantern

was just humor, based on a song title.

Just so you'll know, I am both rabidly pro-gun and anti-war. Our corporate overlords can think of millions of  reasons (dollars) for my son to be killed in the next war, but I don't believe in any of them. Support the troops by keeping them home. When I was young and stupid, I volunteered, but was 4fed. Now my eyes are wide open.

That being said, making money by predicting when the next war will hit is a great idea and I certainly didn't mean to denigrate it.

Green Lantern's picture


Nice of you to show up  yet again  solely to comment on one of my posts and as usually with nothing to add to the subject matter.   Watching out for the other guy.   Let's see defending a man  who shows up out of nowhere that calls TF and forum host a fear monger and sells his ENTIRE stack of gold deep in a bear market.  Way to pick sides.  Asking a writer who pays him off?  Oh theres plenty.   Yes indeed.   You have a real track record-the pot calling the kettle black.   Whatever helps you get off.    Woof woof

Inardozil -I appreciate your follow-up. And I caught the double entendre.  But nice to have some music video's posted once again.  Didn't catch you were only referring only to war and not the material .  So I indeed, stand corrected.   Must have been a knee jerk reaction to guys that show up here in the past like our friend above who says things like it's going to be different this time while admitting he doesn't read the charts to be able to consider the information.  And shows up in the threat for the first time in two years with one contribution only to take exception to my style.   The PUtz Cycle

ata's picture

oooh is that a fact for real I(rish joint)let's be having you

152402 600 How I Got My Marijuana License  cartoons

ata's picture

the G (L) spot

What's the difference between a golf ball and a g-spot? G.L. never stops looking for a golf ball.

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