$Gold Weekly

The gold price chart in $U.S. is unequivocal, meaning that its becoming an academic exercise to demonstrate that there is a bull market in vogue. Note that in the last 3-4 correction that gold prices averaged a certain price through 2007 after the correction, and that the time interval to the next peak was 2 years after its 2006 correction.

This average price was a 40-year inflation-adjusted average, though monetary inflation is much higher than inflation in the economy. So gold must necessarily react to negative real interest rates and adjust for this inflationary trend.

I can see the same happening in the next two years as had occurred previously in 2006 - 2007, where gold prices averaged around a presumed long term average, which should be in the ~$1800/oz. range, to be completed by a blow-off correction at the end.

But this will probably not be the end of the gold price bull market.

supersize: http://www.flickr.com/photos/11747277@N07/6770629185/sizes/l/in/photostream/

stockcharts.com

-F6