Gold‘s rise similar to 1980’s hike – Market analyst Wang Tao
The world market is moving towards whereas the price of gold has reached a peak point. The present Bull Run in gold prices can be mirror image of ultimate height of gold that had seen during 1980 as per Wang Tao, the market analyst. He added that gold prices were highly increasing and it became emotion driven.
While 1980, the price of gold reached to $835, by completing the bull cycle, which was started during 1970 at $34.
He said, that cycle was remedial, made by 3 tiny waves labelled as “a-b-c” the C wave travelled for almost 4,618 times.
This ratio might repeat below the current scenario showcasing gold can hit the market around $4,000 around the some years, he said.
However, he can warned that it was also aggressive to goal $4,000 at present, he was saying that he would reasonably target $2,345 till the end of 2011, that is 261.8 % Fibonacci projection level of present C wave, depend over his wave count and analysis of Fibonacci projection.
The C wave is made of 5 tiny waves along with present labelled as V wave, the last stage of 5 wave cycle, he added.
The last stage is frequently the fiercest rally in merchandises market, as observed in sharp high over last some of the weeks.
Whereas, some financial and political uncertainties like oil price, high inflation, and Richard Nixon’s step to separate gold and United State dollar and Afghanistan’s Soviet interference. During 1980, run to rally in gold till $835. There are also some more reasons due to which flow increases now.
He added, present situation could be worst, because aversion rick has created tight hold over common people’s psychology.
The United States Government and G-7 have been seen practicing their resources to release economy that has been hit the market hard through insolvencies following 2008 subprime debt, tenacious worried which sovereign debt disaster in euro zone outlying nations might spread to huge regional economies, large inflation within soaring prices of commodities and emerging markets.
South Korea’s Central banks, Russia and Mexico to Thailand are inserting gold to their assets in waning faith’s sign in currencies and benchmark bonds such as euro and dollar.