Monday, July 29, 2013

Gold has ended secular bull trend and its affinity for Prime numbers!

A prime number (or a prime) is a natural number greater than 1 that has no positive divisors other than 1 and itself.  Fibonacci number, Prime numbers, a few Geometric degrees or angles all play vital role in providing important information for freely traded markets. We have to see which of the series are well respected. Gold undoubtedly shows its affinity for “Prime Numbers”
The following is published in “The Financial Waves Monthly Update” that gives multiyear target for Gold with clear justification of why we think Gold has started multi-year and probably multi-decadeof downtrend. A small excerpt from the same report is as follows:
Gold has been one of the favorite investment vehicles for over a decade. Prices have increased multifold from $272.22 in 2002 to near 1700 levels (monthly average for the year) or $1920 actual high in just a decade. This is astonishing 7 times or 524% returns in 11 years. People tend to flock to the asset class that has been in a secular bull trend. This is a good strategy but the problem is that when this secular tend ends the next leg of bear market is not acceptable to many investors since they have not seen Gold underperforming during their investment career or probably refuse to accept the fact that it can underperform other asset classes.
Gold spot USD yearly (monthly average) chart:
(Actual chart has many more studies like Time Cycles, Projections, Levels, Elliott Wave counts and ideal chart)
Gold love for Prime numbers: We can see multiple relationships in terms of Price and Time. Gold moved in controlled fashion prior to 1968 and so we can see prices constant at $35 for 33 years. Even in a controlled fashion the time for Cycle…. is 33 years which is 11*3 both of which are prime numbers. The rally then took prices towards $612.56 i.e. An increase of 17 times in 13 years, both of which is again prime number. Next Cycle …. lasted for 21 years which is 7*3 both again prime numbers. Cycle ….started from 272.22 and made a monthly average high of 1700 in 2012 or actual high of 1920 in 2011. Considering actual highs prices increased by 7 times in 11 years (both again prime)
The above is sufficient data to assume Gold movement is driven by Prime numbers. The future forecast is also coming exactly as per this number. We do not have justification for Gold’s affinity to Prime but what we know is that if it worked in past it will work in future as well which has helped us to come out with Gold Price & Time targets!
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