Was Gold Rush , predictable? or it matter of Chance & Luck?
Was predictable?
Was not only predictable, but also not a surprise, and I don't think this was a transpiration of any domination, but a normal, evolution step, in one of our world country, for this time, China.
But before starting talking about China, let's understand one thing...All country, was always buying gold and holding, the only difference why some are buying more now than others, it is simply because, of they healthy financial status. Country like Russia, in fact , has one of the largest if not, the largest reserve of gold. Simply, because, since the start, all gold production, are hold by the government at those time ( Russia, USSR, Tsar etc..). And, they never show they results of production & holding.
But let's look mostly on why gold, quickly rise in price, and how this was predictable, and if you would be a fundamental investors, or a Geo-political trader, you will definitely start buying gold 16 years ago, and keep seeling gold, since past 4-6 years to buyers,
Look at the year 1995 and 1999.
1995
Chinese are very smart people, and strategic. they won many war for this reason, and this is also, why they are so big and strong.
1995, they already start reducing tax of gold from 10% to 5%, this was probably start to create a better interest in gold purchasing, in China population. But it also, shows, China government interest to get in Gold market. When you decrease a tax, by twice, this it is something huge, and you do this to stimulate your economy in this sectors.
1999
This it's the Trigger of Gold Rush, we know right now, when a government, make such reform, you can be sure, this is not a joke, and they will act on they Idea, for next few years.
Since we got or two trigger , let's see how it reflect on a historical XAUUSD chart ( Gold/USD).
There you go... 1999, you see a huge Spike of buyers. This it's the BREAK OUT , of gold, after/before news release.
The reason I say, after or before, it is simply because I don't have the exact date of China's reform release, and I have no interest to look for it, since, my information are already very clear for me.
After what...we can see the price falling down, at almost same price, as it started, and go trough the first continuation....following by many others, until the "Down Break Out" ( when price change to another direction) around 2012.
On following chart, and for all others chart about China's economy since the same period of time, you would see , 2000 years, was the change of direction in good health of China's economy.
As the economy was getting healthier, population growth, people start to make money, business, go around the world, and as you start to have enough resources to easily have access for house, food, school, it is normal, you start to buy luxury stuff, made by the most expensive material , Gold.
With a hight increase of demand by one of the largest population in the world, and a government, who's manipulating inside and outside currency, to buy for cheaper, it is normal, to expect gold price to rise, from 2000 to 2012.
Normally if investors, would be logical, gold price would stop around 450$ and 1400$
for conclusion, there's a market for "accumulation" and "Distribution".
The accumulation time, was gone... since we hit the "double top". But, to sell what was accumulate, so you end with a profit... you need to sell "extra stock" , by making people believe, this is a great deal.
The good part... gold, will be an attractive metal for very very very long time.
The bad part, the current evaluation is way to high...and a correction ( and not a market collapse or crash), need to be made...and this it is exactly what is happening right now.
The last thing to know... it is people, are selling to you, via good old school promotion...TV, Books, Statistic, ect....
just ask you self....if this investment is so "GOOD" , why would a person sell it to you for 10 time cheaper? cause he like you? ...he doesn't even know you...
let me know what do you think about :) Happy day
and thank's for "UpVote" :)