As gold's bear market closes its 4th year, one of the most exciting questions to ask is when to know for sure whether the bull market has returned. Obviously, we have a clear view on that question. While some analysts could believe that the answer is related to gold coin demand, Chinese gold imports, gold to silver ratios, gold to stock ratios, and the likes, our view is completely different.

The ultimate confirmation for gold's bull market is this: gold's 90 week moving average. Gold's 90 week moving average (WMA) has proven to be a very reliable indicator. Want some proof? Simply look at the long term gold chart!

There are several interesting observation on this chart.

  • First, the 90 WMA was breached to the upnside in 1999, 3 times even, which proved to be a clear warning sign that the tide was about to turn (bear market to transition into a bull market).
  • Second, in 2008, with Lehman Brothers going bust, gold broke just once below its 90 WMA, and recovered very fast, indicating the bull market was still intact.
However, in 2012, gold broke big time through its 90 WMA, a signal that the bear market started. Note as well how an attempt to break out in January of this year was stopped exactly (!) at the 90 WMA. Very precise, very striking.

Has Gold's Bull Market Resumed?

We are closely watching gold's 90 week moving average (WMA), which was broken in December 2012, and, by doing so, confirmed the start of gold's bear market. The 90 WMA comes in at $1226.96 /oz, and it will be a critical test for the precious metals complex. At least 3 weekly closes above its 90 WMA will prove to be a confirmation of gold moving out of its bear market.