Top Citi analyst Tom Fitzpatrick’s team sent King World News three extraordinary gold charts illustrating why gold is headed for a massive $2,000+ gain from current levels. KWN is pleased to share this information with with our global readers. Below is what top Citi analyst Fitzpatrick’s team had to say along with three very powerful charts.
Fitzpatrick’s Team: “On a medium-to-long-term basis we remain very bullish on Gold. However, it remains too early to call this correction lower as over, and we still believe that a lower low close to $1,260 can be seen. If so, we suspect that will be a platform for a much higher move in the months and indeed years ahead. The Equity market may also be instrumental in this story.
That low (in gold) was hit at $682 in October 2008, and within 3 years Gold had rallied to $1,921. A similar fall and rally would see Gold at $1260 near-term and then above $3,500 by 2016. That $3,500 number resonates with us for a number of reasons. When Gold rallied in 1970-1980, it went from $35 to $850 (It multiplied over 24 times).
However, in looking at our long-term target and comparing it to this 1970’s period (Our favorite comparative period to today), we truncated our expectations (A 24 fold rally from the 1999-2001 lows of just over $250 would suggest over $6,000 for Gold)….
“Why did we reduce our expectations? While the reasons for Gold going up are (in our view) as strong if not stronger than that period (hard currency), the final move in that trend was “event driven.” On December 27, 1979 the Soviet Union invaded Afghanistan and the Gold price surged from the pre-Christmas level of $473 to a peak of $850 by January 21, 1980.
If you exclude that move, then Gold had multiplied by a factor of about 13.5 from the start of the uptrend at $35. A 13.5 fold multiplying of Gold from the $254 low in 2001 gives us a price around $3,430 (Very similar to what we would see if Gold first went to $1,260, in a move like 2008, and then saw a move like 2008-2011).
Within this (1970s) bull market, Gold had a severe correction in 1975-1976 as the Equity market recovered back towards the 1973-1974 pre-crash peak. This time we have managed to overcome the 2007 peak but it has taken twice as long and has needed zero interest rates, multiple QEs and trillion $ deficits. Is that a better or worse performance than the 70’s????