Bert Dohmen, Contributor
Over the past 39 years, I have rarely used the words “opportunity of a lifetime.” However, I feel there is a good chance of another one in progress. Let’s look at gold since the late 1970s. History may not exactly repeat, but often it rhymes.
In 1977, when my firm, Dohmen Capital, was founded, I started the Wellington Letter and I was correctly bullish on gold. It soared from around $120 when I recommended it to more than $800 during the next three-plus years.
Then, when gold dropped through $694 to the downside, I declared it a bear market. My recommendations to buy put options on many of the popular mining firms made fortunes for some of my readers.
Using cycle studies, I predicted in 1981 that the bear market might last 20 years and then should be followed by a 30-year bull market. I said I had no idea what would cause a 30-year bull market. Now we know. It’s the huge creation of $21 TRILLION of bank credit out of thin air by the major central banks.
The 20-year bear market prediction turned out to be right on target as the next bull market started in 2001.
I have done a lot of thinking about the precious metals and the longer term prospects. One year ago, in my February 18, 2016 issue, I wrote about the 2011-2015 decline possibly having been a cyclical bear market in the longer-term secular bull market. If that is correct, much higher highs are ahead.
The long-term chart of gold below goes back to the start of this secular bull market in 2001. Note that after the correction from 2011 to 2015, it has formed a bullish, potential inverse “head and shoulder” pattern. If it can close decisively above $1,400 I would become even more bullish.
