Why are these trends so long and so big — both, up and down?
My early experience with silver gave rise to decades of observations that have formed my theory about the price cycles of gold and silver versus the US dollar. My first big loss – “big” only in percentage terms since I was just starting out – was with silver in the early 1980s. I did all the right things: I researched it; I bought physical silver; and I bought after it had crashed 70% from its spike. The spike had been caused by the Hunt brothers’ efforts to corner the silver market – manipulation of precious-metals prices being as old as the precious-metal trade itself.
Silver had spiked to over $45 an ounce. After it collapsed, I saw an opportunity. I bought at $14 an ounce in early 1981. Then I learned the meaning of “catching a falling knife.” Silver continued plunging to around $5/oz, for me a 65% paper-loss. It then experienced a surge of nearly 200%, to where I was, briefly, in the black, and euphoria set it. After which I learned the meaning of “dead-cat bounce” as silver plunged again. In 1984, I sold at $7 an ounce, my first-ever 50% loss. I annotated those events in this chart by Goldbroker.com: