Last Updated : 04 October 2011 at 16:05 IST
New York (Commodity Online): Gold crashed from the peak of $1920 and gold prices are now trading at around $1670. Some are clamouring that this is a buying opportunity while others are warning that a down trend has begun.
Martin Armstrong believes that gold has come of age as it has become a hedge against geopolitical and economic instability.
When asked in a Kings World News interview about the coming gold mania, Armstrong retorts “Probably, we tend to call it a phase transition and what people have to understand is when you begin to see that, that’s the danger point when it’s going to peak out and collapse”
“By a phase transition what I mean is, in the 1980 mania for example, from 1976 it went from about $102, up to mid December of 1979, to finally reach $400. The last six weeks it goes from $400 to $875. So it’s a doubling effect that you will see, but in a very, very short, compressed time period. When you start seeing that, that is the sign of a major high, and we haven’t even approached that yet.”
However, in his report about gold's outlook published on September 16, Armstrong had warned that - A daily closing below $1730 will warn of a sustain decline ahead while it will take a weekly closing below $1605 to signal that a correction is indeed under-way.
Gold had closed below $1730 on a daily basis on September 23. Gold prices also came dangerously near a weekly closing below $1605 in the last week of September when prices hit a low of $1530. But gold had rebounded and not recorded the weekly close below $1605.
Martin Armstrong was the founder and former Head of Princeton Economics International, Ltd and was voted as “Americas Top Economist” in 1990 by Equity Magazine. During the financial collapse of 2008, the US congress had turned to this man for advice. Source
