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Gold - the cycles seem to rhyme
by Ron Griess
Proprietor, The
Chart Store
www.thechartstore.com
July 20, 2004
One of the themes of our web site is:
“History may not repeat, but it
does seem to rhyme on occasion.”
The following charts of gold are an excellent example of what we
mean.
Chart 1 Notes: This chart shows both the price of gold and the U.S. Dollar Index (DX). We have added gray shadings to represent periods when the price of gold is going up. Across the top of the chart, we have added the length of each up and down move in the price of gold since 1976. The time frame for each period seems to rhyme. Also shown are the percentage moves for both the price of gold and the DX. For each of the four up moves in the price of gold, the DX has declined. For each of the three down moves in the price of gold, the DX has advanced.
Chart 2 Notes: Analysts have known about the linkage between gold and the DX for quite some time. We have noted the value of the DX at each of the cycle tops in the price of gold. We again find an example of history rhyming.
SUMMARY POINTS:
- The length of the cycle moves in gold since 1976 have been very similar.
- Gold and the DX move inversely.
- If the latest up move in gold has completed as suggested by the cycles, one could logically assume a period of weakening gold prices and a stronger U.S. Dollar.
© 2004 Ron Griess
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