The ongoing bull run in spot gold prices may mimic the climb to dizzying heights seen in 1980 as bullion prices are increasingly becoming emotion drive.
PRLog (Press Release) - Aug 22, 2011 - According to Reuters analyst Wang Toa, the price of spot gold may mirror the rapid climb of 1980 as the metals prices increasingly become emotion driven.
In 1980, gold shot to $835, completing a bull cycle that began with the metal’s price at at $34.95 in 1970, TW-International understands Wang said.
That cycle was corrective, made of three small waves labeled as "a-b-c", and the wave "c" traveled 4.618 times the length of the wave "a".
"That ratio may repeat under the present scenario, indicating gold could hit about $4,000 over the next few years," Wang went on to say.
But he warned that it was too aggressive to target $4,000 right now, saying he would rather target $2,345 by the end of this year, which is the 261.8 percent Fibonacci projection level of the current wave "C", based on his wave count and a Fibonacci projection analysis.
The wave "C" is made up of five small waves, with the current rally labeled as a wave "V", the final stage of a five-wave cycle, Wang pointed out.
The last stage is commonly the most aggressive rally in a commodities market, as seen in the sharp rise over the past several weeks, he said.
Wang also said that while factors motivating the 1980 rally were strong, including high inflation, Richard Nixon's action to detach the U.S. dollar from gold and Soviet intervention in Afghanistan, the latest run also had significant motivating reasons.
That cycle was corrective, made of three small waves labeled as "a-b-c", and the wave "c" traveled 4.618 times the length of the wave "a".
"That ratio may repeat under the present scenario, indicating gold could hit about $4,000 over the next few years," Wang went on to say.
But he warned that it was too aggressive to target $4,000 right now, saying he would rather target $2,345 by the end of this year, which is the 261.8 percent Fibonacci projection level of the current wave "C", based on his wave count and a Fibonacci projection analysis.
The wave "C" is made up of five small waves, with the current rally labeled as a wave "V", the final stage of a five-wave cycle, Wang pointed out.
The last stage is commonly the most aggressive rally in a commodities market, as seen in the sharp rise over the past several weeks, he said.
Wang also said that while factors motivating the 1980 rally were strong, including high inflation, Richard Nixon's action to detach the U.S. dollar from gold and Soviet intervention in Afghanistan, the latest run also had significant motivating reasons.
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