Los Angeles CA, August 29 (Tangible Investments) - by James O’Dell - Gold and Silver prices edged higher on Thursday with Gold gaining $6.45 or 0.50 percent to close at $1,289.45 an ounce as safe-haven buying picked up when European shares declined after Ukraine accused Russia of moving troops into the country. Silver rose 0.06 or 0.31 percent to close at $19.54 an ounce while the Gold/Silver ratio rose to 65.99.
Analyst Abigail Doolittle is the latest expert to predict that equity markets could soon plunge as much as 60 percent. Doolittle, founder of Peak Theories Research, said on CNBC's "Squawk Box" that the Fed's near zero interest rates could trigger a "scary" 50-60 percent correction in the market.
"Unfortunately, I think it could come on a crash similar to what happened in 2007," said Doolittle. "It's tough to know what the exact catalyst will be. But that's the very nature of that kind of selloff. They start slowly and then happen very suddenly."
Doolittle used a 20-year chart of the Dow to make her point. "When we take the long-term chart of the Dow ... we see that it's trading in a multiyear trading range, hitting up on resistance. … What makes this so important [is] you can see that the entire bull market trend over the past five years has started to reverse."
While Tuesday's S&P close above 2,000 may have been a psychological milestone, it means very little technically, said Doolittle. "As high as these stock markets go, I've become bearish because the underlying technicals from the long-term really support this view." The trend is easiest to spot on the Russell 2000, said Doolittle.
"What makes it important is the range has started to reverse the QE3 uptrend. This happened around the QE2 and the QE1 uptrend. ... The gyrations [again] typically signal a correction is coming." Dan Denbow, manager of the USAA Precious Metals & Minerals Fund, said recently that “Some people are slowly returning to buy Gold as they feel the need for a haven asset and also realize that equities can’t keep rising forever.”
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