12 Charts That Will Make Gold Bulls Furious

hot gold melting

Photo: Max0rz / Flickr

The anti-gold bandwagon is getting more and more crowded.Analysts Tom Kendall and Ric Deverell of Credit Suisse is out with a bombshell report this morning titled: Gold: The Beginning Of The End Of An Era.

The article argues that the 2011 peak of $1921 was the top, and that now the run of the cult metal is coming to an end.

The argument essentially boils down to two arguments, which are related.

The first is that we’re seeing rate normalization. When real interest rates are ultra-low, gold does well historically.

The second is that the era of crisis is over, and so the impulse to hedge against collapse (or massive volatility) is diminishing.

Kendall and Deverell establish the argument over a series of charts.

Big thanks to Credit Suisse for their permission to feature several charts from the report.

But in the very long run, gold has surged to near its all-time highs, and is massively above its long-term average.

In real (inflation-adjusted) terms, gold is above historic levels.

Against real assets (like real estate) gold has already gone to unprecedented extremes.

Things really started to change when Mario Draghi gave his speech last summer promising to save the Eurozone.

And now after a long uptrend, gold is starting to fall below levels not previously seen in this rally.

In the meantime, the real economy is clearly improving again.

Things have accelerated even further this January.

Real interest rates have turned higher. That's a gold killer.

US house prices are moving higher.

And the outlook for housing could be even better than people anticipate, further strengthening the economy and improving real rates.

Gold bulls might be thinking that an increase in inflation wills ave them. Turns out there's no statistical basis for that.

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