Two Explanations for the Price Drop in Gold

3 posts / 0 new
Last post
#1 Thu, Dec 29, 2011 - 8:06am
Joined: Jun 14, 2011

Two Explanations for the Price Drop in Gold


As always, Turd has done a great job in presenting a clear, technical analysis of price movement. Here are two radically different analyses that also point to a huge BTFD opportunity in January.

On December 27, Martin Armstrong posted the following, as part of a larger essay entitled "Answering Questions & Gold Reversals" which you can read at

"Our first Monthly Bearish Reversal lies at 1465.70 and the next Weekly Bearish is at 1522.70. The major support begins at 1225 and our year-end number is 1434.

"I may be the only long-term bullish analyst who is bearish on gold near-term ... Let me explain one more time why there is no inflation NOW despite the fact the Fed created almost $3 trillion of elastic money. When you have almost $60 trillion in debt, forget the derivatives and the unfunded liabilities, that contraction is far greater than the $3 trillion the Fed created. At the very least, there is a bare minimum of $15 trillion that evaporated in the deleveraging in debt on top of all the extreme numbers on derivatives. The efforts of QE1 and QE2 failed to stimulate and they failed to create inflation. We are suffering from DEFLATION at this time that is not yet over.

"At the most extreme, gold could even collapse back to retest the 1980 high of $875 if we were to see a Quarterly closing BELOW 1113. That would shift the real rally most likely into the 2015-2020 time slot ... We are reaching that point of maximum entropy where everyone who thought of buying has bought, and in the correction is likely to shake the tree.

"When will gold rally? When we see new bond offerings go unsold in the USA. The critical place to watch is Europe and Japan."

Yet another view was offered back in September by Charles Vollum, at For a number of years, Sir Charles has taken the novel approach of not looking at the price of gold in currency, but looking at everything as though gold WERE currency. He was the only gold bug predicting a short term price drop three months ago, and obviously he was right. His explanation - in part - was this:

"Back in March ... I pointed out that the USD has been losing half of it's value every four years… and that trend remains solidly in place. But currency value decay, like radioactive decay, only appears smooth and steady when you stand back and look at the overall curve. Examined in fine detail, it comes in fits and starts, and with plenty of ups and downs!

USD prediction chart

"A short-term uptrend in the midst of a long-term decline is known as a bear market rally. What might such a rally look like this time?

"The USD's 200 day moving average is now 20.6 mg, implying a $1510 gold price – a level we have almost reached. If that resistance level is tested and holds, the rally may be over soon.

"But when the USD hit its all-time low of 16.4 mg on September 6th, it was almost 24% below the level predicted by the half-life decay curve. In order to return to the curve, the dollar would have to rally to 21.4 mg – equivalent to a gold price of $1450 in USD. And there is no reason a rally should stop there; some overshoot should probably be expected before gravity reasserts itself and the USD resumes its downward trend. An "equal and opposite" over reaction of 24% could carry the USD to 26.5 mg – equivalent to a gold price of $1172."

Both of these guys are calling for a clear shot at $1,450 gold, with a possible dip to the $1,200 neighborhood. This not only represents an outstanding buying opportunity, it also reflects what might be our last chance in a long time to dump any equity positions that we still hold.

There's a lot more great information on the sites of both of these analysts.

Edited by: Paladex on Nov 8, 2014 - 5:02am
Fri, Dec 30, 2011 - 7:34pm
Joined: Aug 10, 2011

alot of good data


I like many of the same target prices but not all of them. 1510 and 1450 area and 1420 maybe even 1400 looks possible to me....I would seriously doubt anything below 1400, since theres other expert insight suggesting that China will step in an buy long before gold ever falls toward 1300 1200 or lower. No. it seems a certain part of the 'currency war' happening among global powers is the selling and buying by global powers...and some of the latest insight,inside info, is that China is screwing up JPM's domination of the manipulation game, China is shorting and pushing gold down , so they can buy it low and then something about their next big push to buy massively at 1900 to drive it over 2000. It is likely true to say that the precious metals (and miners) are a battlefield in these global currency war games. 

Fri, Dec 30, 2011 - 10:56pm
Innocent Bystander
Joined: Nov 26, 2011



for the links! I regret that I have but one hat to tip. is new to me, I've bookmarked it and can't wait to study more of the posts there over the course of the weekend. Pricing USD in gold provides some great charts, and helps to remind which side of the $/gold relationship contains the stable value.

Become a gold member and subscribe to Turd's Vault


Donate  Shop

The TFMR Silver Round
Doc and TF Partnership Advertisement

Recent Comments

by Solsson, 34 sec ago
by Sound Money Minnow, 1 hour 24 sec ago
by Marcus, Jan 21, 2019 - 11:48pm
by sierra skier, Jan 21, 2019 - 8:59pm