The easy way of answering this is to measure the time it has taken $US Gold to go from its absolute low to its present level. Looking at the spot future closing figures, the absolute low was $US 252 set in August 1999. The bull market high (so far) was $US 477. That's a timespan of 74 months, or six years and two months. The other way to do it is to count from the point where Gold (almost) double bottomed, closing at $US 255 in April 2001. That's a timespan of 54 months or four years and six months.
The BIG $US Gold bull market took place from August 1971 to January 1980. That' a timespan of 101 months or eight years and five months. The Dow bull market went from August 1982 to January 2000. That's a timespan of 209 months or seventeen years and five months.
Here's another way of looking at it, using the 1970s Gold bull market and the 1980s - 1990s Dow bull market for comparison.
The significant levels in the Gold bull market of the 1970s are as follows:
Bull Market Start: $35 in August 1971
First Peak: $US 195 in December 1974 - up 457.1% from bull market start
Significant Correction: $US 103 in August 1976 - lost 57.5% of previous gains
Bull Market High: 850 in January 1980 - 725.2% above 1976 correction low
The significant levels in the Dow bull market of the 1980s - 1990s are as follows:
Bull Market Start: 776 in August 1982
First Peak: 2722 in September 1987 - up 250.8% from bull market start
Significant Correction: 1738 in October 1987 - lost 50.8% of previous gains
Bull Market High: 11723 in January 2000 - 574.5% above 1987 correction low
The significant levels in the Gold bull market of 1999 - ???? are as follows:
Bull Market Start: $252 in August 1999
First Peak: $US 379 in December 2003 - up 50.4% from bull market start
Significant Correction: $US 321 in April 2003 - lost 45.0% of previous gains
Bull Market High: 477 in October 2005 - 48.1% above 2003 correction low
The one similarity between the present Gold bull market and the previous Gold and Dow bull markets stands out. All three markets - including the current Gold bull market - suffered significant corrections along the way. Both the earlier Gold and Dow bull markets suffered corrections which wiped out more than half (50%) of their previous gains. The current Gold bull market has suffered a correction which wiped out a little (but only a little) less of its previous gains.
This similarity is significant. The current Gold bull market has ALREADY had a major correction, the one which took place between February and April 2003. In magnitude, in terms of the amount of the previous gains wiped out by the correction, the 2003 Gold correction was less, but very little less, than the spectacular crash which hit the Dow in October 1987.
But more interesting than the similarities between the course of the present Gold bull market and the course of the previous Gold and Dow bull markets are the differences between them. Both the Gold bull of the early 1970s and the Dow bull of 1982-87 had VERY significant gains before their correction hit. The gains enjoyed by the current Gold bull market before its correction hit pale into insignificance by comparison. And look at the even more significant gains which the earlier Gold and Dow bull markets enjoyed AFTER their corrections. The gains on the current Gold bull market can hardly be seen on a comparative scale.
Let's put this further into perspective. The current Gold bull market has yet to double its low point. It started at about $US 255 - it has yet to reach $US 510. In terms of spot future closes, the current Gold bull has yet to reach $US 480. The 1970s Gold bull took less than a year to double from its starting point. The Dow bull took just under two and a half years to double from its 1982 starting point. Clearly, by comparative standards, the current Gold bull market is as yet but a pale shadow of the two MAJOR bull markets of the last three decades of the twentieth century.
The definitive market which was affected by the REAL GOODS price inflation of the 1970s was the Gold market. Hence the bull market. The definitive market which was affected by the FINANCIAL ASSETS price inflation of the 1980s and 1990s was the stock market. Hence the bull market.
The transition from this three decade era of clear-cut price inflation has come since the stock markets peaked in early 2000. The transition period has been marked by the manic lowering of US interest rates in 2001, the peak of the US Dollar in early 2002, the distraction which was Iraq in 2003, and the Presidential Election year which was 2004.
In August 1999, the $US Gold price stopped going down. In April 2001, it started going UP. From that day to this, albeit very slowly (in comparison to the great bull markets which preceded it), the $US Gold bull market has been slowly forging steadily higher. It has to this point absolutely escaped the radar screens of world investors.
There are two major reasons for this. The first one is minor. It is the simple "conviction" still held by (at least) 95% of the investing public that Gold was in a bear market from 1980 to 2000 and remains in one to this day. They have simply not noticed the fact that in the four and a half years since April 2001, the $US Gold price has nearly doubled.
The second reason why Gold is NOT yet being considered a promising investment is the major one. The world has come through a quarter-century (since 1980) during which the money making opportunities were in financial (paper) assets. The production of "money" has been lauded to the skies . The production of WEALTH has been sneered at and so have its practitioners. For a quarter of a century, the very concept of the "debasement of the currency" has been seen, not as an economically-fatal expedient undertaken by desperate governments, but as the acme of "financial management". In financial markets, the past 25 years has convinced almost everyone involved with them that THIS TIME - finally and at long last - IT REALLY IS DIFFERENT!
This year, that conviction has started to slip. Since the disastrous storms of late Summer in the US, it has started to slip faster. But it will take more than a man made disaster in New Orleans and a growing pain in the hip pocket worsened by every trip to the gas pump to overturn 25 years of terminal confusion about how economics and finance REALLY works.
How old is this Gold bull market? In terms of time, it has been going quite a while now. In terms of the understanding of the impetus behind it, it has not even gotten truly started yet. It takes a long time to overcome the results of 25 years of rampant misinformation. It takes a long time to convince people who have spent their adult lives being told that the stock market will go up "forever" that it really ain't so. It takes a long time see the REAL consequences of monetary debasement when those in power do everything in their considerable power to make sure you don't see them.
The vast majority of global investors STILL don't see them. That's why the Gold bull market is still "young", even though it has been going for most of this century.