Every time the price of gold "cooled off" in past months, it soon "heated up" again.
You might call it "gold fever."
It led to the yellow metal's exponential rise, in a trend that actually started more than a decade ago.
Gold reached a high of $1921.50 as recently as Sept. 6. A few short weeks before that top, the August 19 Short Term Update said:
"Commodity blow-offs occur when the rate of ascent of a particular market becomes exponential. [Gold] seems to fit that bill when plotted arithmetically. The...monthly chart shows the steepness of the rise relative to an upward curving bowl. Exponential rises never end moderately; always down, often sharply, as investors have to sell in order to lock in any accumulated gains...Gold's rise is not sustainable at the current pace...Prices could decline hundreds of dollars over a relatively short period of time once the inevitable reversal occurs."
That same issue of the Short Term Update displayed this chart:
And gold prices have indeed plummeted by "hundreds of dollars over a relatively short period of time" as described in the quote. Gold just had its biggest three-day tumble in 28 years! Intraday trading has included triple-digit swings.
Is "gold fever" broken, or do we expect prices to heat up yet again?
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