The recent dramatic gains in gold have brought back memories of the late 70's and early 1980 for many. But some of these memories may be just a little hazy. I myself was just in grade school, but still recall the talk of the price of gold and of the silver market being "cornered." It had the flavor of excitement even back then.

To refresh my knowledge of just what happened to gold, I dug out the following price chart of gold's move in 1979. This chart of October '79 Comex Gold comes courtesy of Jack Schwager's excellent book, Schwager on Futures. (Schwager is better known for his extremely excellent book Market Wizards - interviews of the greatest living traders).

As you can see from the this chart below, the price of gold nearly doubled in one year -- from the 230's all the way to $440 by the beginning of October. Many of us know what came afterwards, but for the time being, examine the chart as if you were holding gold back in 1979. What would you do? The price had nearly doubled, there was a parabolic rise and some choppy consolidation. Would you roll out into the next contract month - April - hoping for higher prices, or would fold your hand, happy with your gains?

Looking at a chart in retrospect, it is deceptive to think that making money trading is easy. Just buy low and sell high. But how low is low, and how high is high? The great trader Jesse Livermore is quoted as saying, "A stock is never too high to buy, and never too low to sell."

Tomorrow, we'll take a look at what happened to gold in 1980 with another chart. If you'd like to be notified when it is posted, please subscribe to updates.

And if you have an interesting story about gold, or trading in general, I would love to hear it. Please drop me an email at: bull@bullnotbull.com

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