A statistical analysis
The recent gains in gold prices have inspired discussion within the marketplace concerning where the price of gold will head in the future. A number of commentators are bullish on the prospects for gold and although firm predictions are impossible, analysis of the trends provides valuable insight into where the price of gold may head. The current possibility for an impending bull run on gold seems very real. If that happens it will benefit the industry participants which are nimble and dynamic with their operational models.
The chart above shows the historical prices for gold from the year 2000 until today in a logarithmic format. Firstly we see that from the beginning of this century until gold’s peak in 2012 the price rose by around 600% — a massive windfall for investors.
It is interesting to note what happened after the last peak price and how that bodes for gold’s future value. From the peak in 2012 until today there was an 8-year span that could represent a halfway bull flag. The potential opportunities in this scenario are incredible.
From the beginning of gold’s last price surge in 2000 until its peak in 2012 the appetite for gold pushed prices higher drawing in more investors. Since the last peak, we’ve seen the price of gold fall as the market became saturated and weaker participants divested their gold. What is interesting is what the pattern of the last trough seems to indicate. The chart below from Twitter analyst @Northst18363337 identifies this point well.
What we see in this chart are two lines representing the highs and lows or the resistance and support prices for gold over the last 20 years. Since 2012 the price of gold fell and rose again, represented by the curved parabolic line which identifies the supporting prices during that period. It is very possible that this fluctuation in prices over the previous 8 years represents the market finding equilibrium after the 600% rise during the last bull run.
The possibility now exists that the market has found its equilibrium and prices will move into a new trading range for the future. The current price of gold is hovering around $1,500 and if the same gain profile from the last bull run holds true we could be looking forward to gold prices reaching $8,000-$10,000 range within the next ten years. For those who missed out on the last gold bull run, a new opportunity may be about to present itself.
In this new era, the process of purchasing gold is changing through the developments of security tokens in the marketplace. MetalStream’s MSGLD security tokens are backed by and redeemable for gold bullion and represent significant value for subscribers as they are sold at 30% less than the spot rate of gold. MSGLD tokens offer liquidity beyond physical gold as they can be continuously traded globally and reassigned to the rightful owner in the case of loss or theft. MetalStream’s security tokens do not expire and can be traded indefinitely until the physical gold is redeemed from MetalStream Ltd.
As the price of gold rises the value proposition for MSGLD improves. New subscribers to MSGLD are already purchasing gold at approximately a 30% discount to the spot price of gold. As the tokens are backed by physical gold bullion their market price will be very close to the spot price. If there is some discrepancy the prices should eventually stabilize as smart arbitrage traders and bots take advantage of the temporary price mismatch to purchase underpriced gold.
MetalStream is committed to the success of MSGLD tokens and we would love to see our subscribers receive a stag profit of around 50% delivered through a rise in gold prices and the initial 30% discount to spot price.