As natural resources bounced all over the charts in 2014, readers turned to the experts interviewed by The Gold Report for insights on what was driving these ups and downs, and how they could protect themselves—or, better yet, benefit—from the volatility. We combed through interviews with experts featured during the year, and offer some thoughts you might want to consider as you prepare for 2015.
Steven Hochberg, chief market analyst at Elliott Wave International, drew a record number of readers and comments with his chart showing a pending countertrend for gold. “Many indicators are confirming that we're in the end stages of the rally that started in 2009. Sentiment is one. Sentiment tends to get very extreme at trend reversal points. It is extremely optimistic at highs and extremely pessimistic at lows. The bears shrink down to almost nothing when you're coming into a rally high. Recently, the bear contingent shrank down to 13.3%, which was the lowest in 27 years.”
He concluded: “For the first time in three years, we were able to count a complete declining Elliott Wave pattern from gold's 2011 high. We saw extremes in sentiment that suggested to us the start of an impending gold rally. I think that rally is in its very infancy right now. Ultimately, it's going to carry gold higher. I think gold has upside potential from here.”
Shadowstats economist Walter “John” Williams also saw good news for gold in 2015 as part of his hyperinflation forecast for the coming year. “Fundamental economic activity as measured in areas such as retail sales, industrial production, housing starts, payroll numbers and the broadest measure of unemployment—all those numbers are going to deteriorate. The economy is going to head down as we get into reporting in early 2015. Along with that will come renewed expectations of action by the Federal Reserve to accommodate the financial system, particularly the banking system, and the combination of those factors will, I believe, help to trigger a massive decline in the U.S. dollar. As a result of that, we will see spikes in commodity prices, such as oil. We will see a flight to quality in areas such as the precious metals—gold and silver.”
Former Federal Reserve Chairman Alan Greenspan also lauded the prospects for gold during a presentation at the New Orleans Investment Conference. “Gold, and to a lesser extent silver, are the only major currencies that don't require a third party credit guarantee. Gold is inbred in human nature. Gold is special. For more than two millennia, gold has had virtually unquestioned acceptance as payment to discharge an obligation. Remember, Germany could not import any goods in the last part of World War II unless it paid in gold.
