Gold prices found support around the $1,700-per-ounce level, closing the week at $1,700.90 per ounce (see the following chart).

Gold remains in a bullish trend, with the precious metal up about 35% over the last year. By contrast, equity index averages such as the S&P 500 are down approximately 15% since reaching their all-time highs earlier this year.

This may well be just the beginning of a long-term gold bull market. The exploding amount of dollars now being pumped into the U.S. economy could have a significant future impact.

Analyst Victor Dergunov made some historical comparisons in a recent Seeking Alpha article: “From 1971 to now, the monetary base has increased from about $80 billion to roughly $3.9 trillion, an increase of around 4,775%. During this same time frame, gold has surged from about $36.56 all the way up to around $1,720, a percentage increase of roughly 4,600%. …

“This [current] monetary expansion likely means substantial higher prices for gold going forward as well. If we use a $3.9 trillion to $10 trillion formula, we see that this is about a 156% increase. Thus, if we apply this same percentage to gold, we could be looking at gold prices of around $4,400, possibly within 2-3 years.”

Rick Andrews is president of Avant Capital Management.