Are We in for a Third Bull Run for Precious Metals?
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Over the past few weeks, the precious metals market has experienced a slight decline in prices from their recent surges in the past couple of months. While near-sighted investors may consider it bad news,the reality is not exactly how the current situation appears to be—and you will be able to see it more clearly after some time.
Taking a Look Back at History
Ever since the gold regulations were lifted in 1971, gold prices have had observed two significant “bull market” shifts.
The first Bull Run began in 1971 and stayed until1980, where the gold price surged by a whopping 2100 percent. The second Bull Run started in 1999 and ended in 2011, where the gold price reached a peak of a stellar 650 percent. These shifts can be seen in the chart below:
It’s also notable how the prices dropped at the beginning of the Global Financial Crisis 2008-9 but then skyrocketed again after some time. Finally, you can also see how 2015 had the most recent “lowest”gold price. With all these figures, one question remains:
Where Will Gold Prices Go From Here?
In an interview on the 18th of March, Jim Rickards, the author for the best-selling books “The Road to Ruin” and “Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos,”answered this question for us.
According to him, if we average out the gain and duration of the past two bull runs, the lowest price point in 2015 of $1,051 could be the beginning of the third rally for gold. This new Bull Run could mean a price surge of up to $11,000 per ounce of gold by February 2026.
Rickards also noted that the sample size might be too small to make an exact prediction. However, the price of gold could also follow the trend during 2008 and 2011, where it initially declined before it was followed by a sharp rise.
Let’s take a closer look at that period in the chart below.
The peak price of $1900 per ounce in 2011, after a sharp decline from the year 2008, is another reason why investors will turn toward investing in gold during the 2020 crisis.
A Stellar Surge Right After a Major Decline —How Does This Happen?
According to Jim Rickards, there’s a reason why gold prices have always bounced up higher after a depression throughout history. It’s because influential investors wait for distressed gold sellers to reduce their rates in times of crisis.
They keep an eye on every movement on the charts and wait till the price reaches the lowest bottom. And when it’s there, investors jump in to buy and stock up on gold. The high demand and selling ultimately result in a price surge, bringing the gold’s bull market back on track.
He further stated that the decline of gold prices amid the COVID-19 pandemic is not at all unlikely. As the world moves toward a market breakdown and liquidity crisis, it had to happen—as it always has during past financial crises. And gold prices will soar high again—as they always have.
The Increase in Demand for Silver and Gold Bullion
According to the recent statistics, the U.S. Mint has sold approximately 2.32 million one-ounce silver bullion coins during March.
This is a significant increase considering that the total sales recorded during February were 650,000 silver coins. It’s also important to note that the premiums on precious metals are reaching new heights, with gold and silver being sold at 6% and 85% premium, respectively.
Investors, Be Prepared!
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We are among the leading precious metal companies that facilitate their customers who want to buy silver and gold bullion online. We also offer secure vault storage for gold and silver. Reach out to us for expert advice!