The current gold bear market is just several weeks away from being the longest one in history. Already, it is the worst bear market by price decline ever!
Below are the bear markets of gold plotted against the present bear market - a decline that started in April 2011. This chart effectively highlights just how relentless the past four years have been for precious metals investors.
As the bottom in gold and gold stocks approaches, we wanted to look back in time to see what investors can expect coming out the other side. First of all, we ran a bull market analog of all the major bull markets. These bull markets have been charted as if they all began on September 30, 2015.
Next, we averaged those four bull markets together to plot out a basic return.
The average duration of a gold bull market is 216 weeks, or just over four years. More importantly, the average return for a bull market is a whopping 450%!
Since the beginning of the current bear market, the BGMI has dropped -80%, representing the largest drop in BGMI history. While we do not know for sure when this bear market will end, we do know that the upcoming bull will result in significant gains as it has always done in the past.
It is worth noting that the BGMI is an index comprised of gold mining companies, and does not account for junior explorers and developers, a sector that has fallen over 95%. Historically, these small junior companies can return 1,000% or more in a bull market!
Special thanks to Jordan Roy-Byrne at thedailygold.com for the bear and bull analog charts.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.