Despite gold’s recent decline, gold is in a major, primary bull market uptrend and it has been for many years, explains Mary Anne and Pamela Aden, resource specialists and editor of The Aden Forecast.
We believe this current bull market will continue to rise in the years ahead and gold is headed much higher. That’s why we continue to recommend gold. But within gold’s bull market, it has ups and downs. This is normal.
Remember, no market goes straight up or straight down and gold is not an exception. We have identified these cyclical ups and downs as A through D movements. The D part of the decline is now in process, but this is an intermediate decline within the bull market and it does not mean a crash is coming.
Gold is still a safe haven. For now, the dollar is the favorite but we’re sure gold will regain its safe haven crown in the not too distant future. If you did not sell any of your gold shares, don’t sell now. That ship has sailed. Instead, just plan to hold for the long-term, which is what we’re doing.
As far as gold and silver go, we did not advise selling any of your physical positions. These are to be held for the long-term and we believe you’ll be glad you did.
Meanwhile, the stock market is dropping in a steep renewed decline. The market is clearly bearish. It just finished its worse first quarter since 1939, losing $7 trillion, and this bear market has a lot further to go. That is, it’s still in the early stages.
Despite the recent weakness, it’s most interesting to note that stocks remain extremely expensive, based on the p/e ratio. Indeed, stocks are at the second highest level, going way back to 1900. They’re currently even more expensive than they were at the peak in 1929. This also tells us that stocks are set to fall to much lower levels.
Unfortunately, based on several indicators, it looks like this bear market is going to be a big one. If this bear market ends up being similar to the bears in 1974, 2002 and 2009 — and we believe it will — then stocks could plunge.
In other words, it would not be unusual to see the S&P 500 drop back down to near its 73 year uptrend around the 1800 level. If it does, that would be a drop of 55% from current levels. If this happens, it would be an extreme bear market decline because bears generally average losses of about 34%.
But again, considering the bull market since 2009 was fueled by totally unprecedented liquidity, thanks to massive money creation, which soared to unheard levels due to covid, it would stand to reason that the resulting bear market would be extreme as well.
And last but not least are the global stock markets. They’re all mostly bearish and recently had their weakest month since the beginning of the pandemic. That’s not good news and the entire global picture continues to signal, stay on the sidelines.
If the global economy is going to keep slowing down, very possibly sliding into a recession, you don’t want to be in stocks. For now, it’s best to keep avoiding the general stock market, at least for the time being.
