Gold – bull market or just a bear market rally

While many are touting a new bull market in Gold, and Silver for that matter, history suggests otherwise. When we look back at the history of commodity prices for the past two centuries we observe generally short bull markets followed by longer bear markets. Since Gold was fixed for most of this period a chart going that far back would be of little use.

CRB history

Notice for over 200 years commodities remained in a trading range. Demand drove prices up, then oversupply brought prices right back down. This all changed when the US went off the Gold standard in 1971. Commodity prices soared, along with Gold, and the bull/bear cycles became more uniform.


Gold has had two bull markets since then: 1970-1980, and 2001-2011. In between was a lengthy two decade bear market. The same pattern, with slightly altered dates, can be found in most of the commodities. For example, Crude had a bull market from 1970-1980 and another bull market from 1998-2008. In between was a lengthy two decade bear market. And Crude is currently still well below its bull market high of $147/bbl.


When we examine the last Gold bear market in detail we find it had three significant rallies during its 1980-2001 bear market. One in the early 1980’s, another in the mid-80’s, and the third in the mid-90’s. The first two rallies retraced only 38.2% of the previous larger declines, and the last retraced about 50%.


If we then apply these retracement levels to the current bear market rally we arrive at some interesting potential price targets. A 38.2% retracement of the entire 2011-2015 decline is $1381, and a 50% retracement is $1485. Since Gold has already risen to $1377, and if it clears the $1381 level, the 50% retracement level is probably the target. If we then compare the three waves within this advance we find that Major C equals Major A at $1463. This gives us an upside target for the entire bear market rally between $1463 and $1485 in the weeks and months ahead.

This is just an observation based upon historical and current wave formations, and not a trading or investment recommendation. You can follow Gold along with us using the following link:

About tony caldaro

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33 Responses to Gold – bull market or just a bear market rally

  1. opader says:

    Thanks Tony …. Very interesting, gold being in a Cycle 2 (bearish) supports my thoughts that SPX might go much higher between now and EOY ….

  2. nyjsec314 says:

    Bear rally if true could be an even bigger trap than the squeeze the bond short crowd just got caught in.

    One thing that does confuse me is, if we’re about to end a multi decade bond bull market, and commodities typically rise on the back of rising rates, what correlation here is going to break off from historical norms?

  3. bud67 says:

    Wow……great work on the GOLD charts, Tony.
    Great work. Kinda, nice to see you add
    new investment ideas……end

  4. herringjd1 says:

    Much appreciated

  5. Ajney says:

    Thanks Tony!

  6. 123 abc says:

    Tony, thank you the excellent OEW analysis of gold.

    Historically, gold tends to have an inverse relationship with the dollar. So, if gold does complete its bear market rally in the weeks/months ahead; then the expectation would be for the dollar to resume its rally.

    However, the current OEW count for the dollar is already in its final Primary-c rally. Therefore, in regards to the dollar…

    a. Could the dollar still be in its Primary-a wave from its recent SuperCycle low?
    b. Or, does OEW expect the dollar to extend its Primary-c wave in the current count?
    c. Or, does OEW expect the dollar and gold to decline together?

    • tony caldaro says:

      that relationship does not work all the time
      the USD went down from 1985 to 1996 and Gold went down too

      • CB says:

        Great analysis as always, Tony. Thanks.

        RE: the USD strength. Tony’s monthly chart indicates that the USD in a bull market, so why should the upside be limited?…DXY has only retraced ca. 61.8 of its decline since 2001. ..
        And, fundamentally, all the political angst around the world recently (over Brexit & what happens to the EU next, for instance) will undoubtedly keep supporting the USD ( even in a prolonged low interest rate environment). As international tensions rise, the USD will maintain its safe-haven status. That is until/unless we get into a war with China….but that’s a very distant possibility right now, so no reason to worry about it at this point ..

  7. ariez5 says:

    Hi Tony, Thanks a lot for this. I write as a pure agnostic on gold. Also, for the big picture, I think it may be helpful to look at the fundamentals. It seems to me that the bottom in gold was put in in conjunction with the ECB cutting the interest rate on its deposit facility to -.30%. Until the direction in interest rates around the world changes direction, it is hard to see the rally ending. When banks have to pay up simply to hold many of the world’s most significant currencies, there seems to be a fundamental reason to diversify into gold to preserve purchasing power.

  8. rajnionam says:

    Tony can u please throw some light on indian gold price as it is near all time there any corelation between indian gold market and global gold price?

  9. Makes sense in the context of a continued equities bull run. Hard to believe they both rally together for long.

  10. fionamargaret says:

    Joanne Klein has gold with a 10 year bull, 4 year correction, and now….a new bull??

  11. Hi Tony, would you include monthly charts for major indices and commodities in your Stockcharts link? That would be even more helpful. By the way, I noticed negative divergence in monthly and weekly RSI of gold. I also noticed negative divergence in monthly MACD [lower low than 1980s despite much higher price] — does this suggest overall downtrend? Again thanks for your great help.

  12. fotis2 says:

    Many thanks for the update Tony .

  13. Hi Tony, I happened to think of the same thing, a bear market rally like 1982. Gold might be close to A wave high (1381?) now, and might reach C wave high of 1485 after a B wave correction? Would the B wave correction target be the 38.2% or 50% of the rise ?

    Would you write a similar article for oil? Though your point about oil is pretty clear now, an analysis would still be appreciated.

    Many thanks for your very helpful analyses and replies. Have a great new week

  14. Yes,appreciate the viewpoint.If this is a bear rally–it’s an impressive one.The fact that gold has risen as much as $200 over its 200d seems reminiscent of the bull of 2008-2011.That type of price action hadn’t happened in the last 4 years at all-not even close.But thanks again.

  15. Page says:

    Thanks Tony. Another awesome analysis.

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