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Gold Bull Market: Welcome Back
Pinnacle Digest writes: Way back when, Charles Munger stated that, "Civilized People Don't buy Gold". Was he wrong, why did he say it? In this article, Bob Hoye explains why he believes the gold bull market may have resumed and why Charles Munger is not only wrong, but suggests to him that, "civilized people should abhor an experiment in unlimited government funded by central bankers with unlimited ambition."
Hoye explains that the extreme slide in gold stocks accomplished one of the worst, oversold conditions in a hundred years. At 24 on the monthly RSI it was the lowest level and second worst consolidation since 1924 when the RSI was at 22. Technical measures of the plunge we all witnessed into March and April suggest we have now entered a new bull market. The rise out of the middle of May has had two constructive corrections. With that said, Hoye believes a large test of the lows with a following advance would confirm without question a new bull market in gold has arrived.
The world has likely begun a cyclical recession which almost always means a cyclical bull market for gold's real price. Hoye reminds us that the gold sector is the only sector with a track record of doing well when most of the economy is suffering from post-bubble pricing pressures.
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