When the bull starts, the trajectory may be quite steep, depending on how depressed the price was. The duration of bear market in stocks is 1/2 the bull market, so, say, 9 years, 2 1/2 years already have passed. We are 3 years into gold bull, since in most currencies gold made an all-time low in the summer of 1999, and has increased 18-50% since then (depending on currency), 18% in Swiss francs.
Now, to illustrate a possible source of demand, let's take, say, Russia. Population < 150Million, GDP is around 800 billion, so roughly 1/12 of US. The population hoards 70 billion dollars in cash, which it calls "hard currency". There is no desire to hoard Euros, although since the dollar fell so much, they may start hoarding them. Assuming there is competitive devaluation, and these people no longer trust Euros, or dollars. What if they decide to hoard... Gold? or silver? 70 billion is enough to buy 2/3 gold in Fort Knox at current gold price. and that's only 1/40 of World population, and 1/..... of the World Wealth.
I don't know about Euros, but you can take it to the bank that the Japanese will try to devalue Yen when their efforts to prop the dollar fail. And you know that CBs are helpless when it comes to currencies, so the dollar will continue falling. |
