Is this gold bull market over? In order to answer this question one must have an understanding of how bull markets usually work. First let me say that no one has a crystal ball, and therefore no one knows for sure what will happen in this bull market. This is purely my opinion based upon how markets have functioned in the past.

Bull markets generally work in three phases, which I will call the accumulation, awareness and panic phase. In the first phase, the accumulation phase, the asset quietly goes up without too much attention being paid by Wall Street or the general public. The first phase of this gold bull market ran from 1999 until about 2005.

The second phase, the awareness phase, is where Wall Street and the general public, begins to pay attention and then participate at a higher level. Values begin climbing at a faster pace towards fundamental values. In my opinion this is where we are now. The evidence of this is very apparent. Commercials are popping up all over the TV and radio; people are beginning to talk casually about it and investment firms and foreign central banks are buying. Generally speaking the second phase will usually last five to seven years.

The third phase, the panic phase, is where everyone sees what is happening and everyone wants in. Wall Street and the general public are going all in buying up whatever they can. Values begin to go up very rapidly, far above fundamental values. This phase can be compared to the real estate market of 2004-2005 and the dot.com bubble of 1999-2000.

So is this gold bull market over? I say that we are no where close to the end. I believe that we are only in the second phase and that based upon what is going on with the dollar that we have 3-5 years to go before gold tops out. Some experts are saying that just to reach our inflation adjusted high of $850 per ounce in 1980, that gold values would have to reach somewhere around $2,300 per ounce.