The Last Gold Bear Market:
Gold fell from $US 499 to $US 325 between December 1987 and March 1993. The extent of this fall from top to bottom was 34.87%. The duration of the bear market was 5 years and 3 months (63 months).
The Present Gold Bear Market:
Gold fell from $US 414 in February 1996 to a low of $US 253 in September 1999. The extent of this fall is 38.89%. With no bull market yet established, the present bear market has lasted for exactly 5 years (60 months).
If you read the synopses of the last two Gold bear markets above, you can see that together, they have taken 124 months, or a little over ten years. In the middle of that period came the sharp Gold run up in 1993 and a little over two years of sideways action between late 1993 and early 1996. Except for that period, Gold has been in a bear market ever since the end of 1987.
On the other side of the (you should pardon the expression) "coin", U.S. stock markets - at least, as measured by the Dow - have been in a bull market for nearly 19 years - since August 1982. The way Wall Street measures it, the Dow is not yet in a bear because it has not yet closed 20% or more below its all time high. The fact is, though, that the Dow stopped going up about two years ago, has spent most of the intervening period going sideways, and has now given every indication that it is poised to start going DOWN.
Right now, there are two aspects of the financial (paper) markets which are still intact. The Dow is hanging in there. And more to the point, the U.S. Dollar itself is on an upwards rampage. Gold, in U.S. Dollar terms, is almost back to its 1999 lows. In terms of every other major currency (except the ones tied to the U.S. Dollar), it is actually climbing - slowly in some cases and not so slowly (the Aussie Dollar price being a good example) in others.
As you can see from the charts on the left, especially the P&F chart, $US Gold is being squeezed into a tighter and tighter range. We are slowly approaching the point at which $US Gold will have nothing left to do except dive below its 1999 lows or turn upward. If it turns upward, the chances are increasing that we will see the kind of surge that Gold made in the summer of 1982, the spring of 1985, and the autumn of 1999.
The big question remains how long can the strength of the U.S. Dollar last? Things have reached the point now where reputable economic analysis holds that lowering interest rates is GOOD for a currency because it shows the currency markets that the nation in question is "serious" about pursuing "growth". The nation most serious about pursuing "growth" over the past decade (and a bit) has been Japan - they have not lowered their rates, they have eliminated them. And just look at them!
The ultimate contest remains as being between the world's reserve currency (with all other currencies sidelined) and Gold. If the Dow manages to claw back above 10000, the situation may well be drawn out further. But no matter what happens to U.S. stock markets, the Dollar CANNOT go up forever. As long as Gold is only sliding gradually against a rampant Dollar, and therefore at least holding its own against the rest of the world's currencies, the chances of a break below the 1999 $US lows are not high. On the other hand, we are going to have to get a bear market in EVERYTHING else (including at least a downdraft on the Dollar itself) before a $US Gold bull market can firmly establish itself.