The list of 2008's Ten Biggest Financial Shockers is in. Topping the charts: The "bewildering" performance of Gold Prices.
The story begins in early March. At the time, global economic growth went skydiving from 30,000 feet up, without a parachute; all the while gold prices enjoyed a meteoric rise to new heights. And, as far as the go-to-guys-and-gals of Wall Street were concerned, so long as the former kept plunging, gold would continue to soar.
Here, the following news items from the time paint a definite picture:
· "Gold is going gangbusters as investors flocked to a safe haven amid … growing fears of a US economic slowdown and expected interest rate cuts sparked demand for shiny bullion." (The Toronto Star)
- "The unprecedented gold bull of 2008 is getting stronger all the time. My target price is $2500." (AP)
- "Gold is headed to $2000 an ounce." (DJ MarketWatch)
As the mainstream experts geared up for a "perfect bullish storm" in precious metals, EWI's analysts foresaw a bearish cold front moving in at breakneck speeds. In the days leading up to gold's historic, March 17 peak, our publications presented the following insights:
March 14 -- Elliott Wave Theorist editor and Elliott Wave International presidentBob Prechter wrote: "So, what's next for gold? Today, the economic expansion is hanging on by a thread. If the relationship shown here holds true, gold should peak concurrently with the economy."
March 14 -- Short Term Update presented a powerful close-up of Gold Prices alongside the headline: “Waiting For A Reversal" and said: “Gold hit the psychological motherlode when it pushed to $1000. WE may have to wait until closer to the end of next week before prices make a turn lower, but any decline beneath $960 should be a clear early warning that a declining phase is starting.”
April Elliott Wave Financial Forecast identified a "minimum target area" for the decline in the "$560-$728" territory.
What followed: a seven-month long, 30%-plus selloff to a one-and-a-half-year low in the exact target range: $680 per ounce.
Then, right off of gold's October 24 bottom, the October 29 Short Term Update set the stage for a powerful rebound. In STU's own words: "A strong push above $776 will be the markets signal to us that it is in a larger push, one that should carry toward $821 and possibly even higher."