ROSS NORMAN : The Stealth Gold Bull Market

There is a tendency to look at the gold price in US dollar terms simply because that is the currency it nominally trades in within the bullion wholesale market. The bias is reinforced by the headline writers who do likewise… yet meanwhile in other currencies gold has been in a stealth bull market these last 4 years.

Guess where gold was trading at on 4thJanuary 2014 ? Exactly where it is now … at $1232.

However, in GBP terms it has risen from £748 to £955 - that’s up 30% or 5.6% pa compounded. This is roughly half the average rate of increase we have seen over the last 20 years in GBP terms. But still knocking UK property prices into a cocked hat. 

In Euro terms, it has risen from e888 to e1080, a gain of 21% or 4.3% pa compounded. The effect has been equally dramatic in countries that have a strong affinity for buying gold such as in China (up 15%), Russia (up 94%), India (up 18%), Turkey (up 156%) and Switzerland (up 13%).  


… and the party is just beginning. 

Gold’s price action in the last few weeks is suggestive to us that technically it seems to have found a floor, while a shift in perception about the outlook for economy has meant that a large number of speculators have been caught short. This is to say that gold’s recent price strength owes more to short-covering than to fresh buying.

We can see this reflected in its failure to breach relatively minor technical resistance levels (such as $1240 touched but not breached in the last 2 days) which should represent little more than a speed bump. In short, gold has not yet achieved any significant momentum to the upside and the confidence of the bears still looks fragile. 

As a deeply unloved asset gold is not doing too badly and arguably the best still lies ahead of us … meanwhile gold does what it should in providing wealth protection, especially for those suffering from currency weakness - essentially those outside of North America.  


Ross Norman

Sharps Pixley Ltd
54 St James's Street
London SW1A 1JT 



25 Oct 2018

About the author

Ross Norman

Ross started his business career with business guru Sir Clive Sinclair of Sinclair Research in Cambridge, before joining Johnson Matthey as Gold Refining Manager (then the worlds largest gold refiners), then as a gold trader at NM Rothschild & Sons (the Chairman of the London Gold Fixing) and later Credit Suisse, where he was a Senior Dealer in physical bullion trading.

Ross has an enviable record within the London Bullion Market in forecasting the gold price over the last decade and is frequently sought by the media for commentary on the bullion markets. Ross has made frequent appearances on TV (BBC, CNBC, CBC) in newspapers (FT. Wall Street Journal) as well as in the newswires (Reuters, Bloomberg and Dow Jones).