Gold hit a new multi-year high spot future close of $US 358.10 on January 16, its highest since March 4, 1997. As you can see on the weekly bar chart below and to the left, it has now closed higher for seven consecutive weeks.
Even more impressive, as you can see on the Gold Bottom chart, Gold is now threatening to break above the TOP of its post April 2001 upchannel. $US 300 has long since been left in the dust, but the Gold $US 329.70 intraday high of early June 2002 was only exceeded in December, and now, Gold is almost 9% above that level. The Bull market is alive, well, and threatening to accelerate.
Here are the relative performances of $US Gold, the $US Index, and the Dow since Gold broke above $US 300 on March 27:
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Something new has been added to this table since last week. Gold now shows a bigger percentage increase than the Dow does a percentage decrease since March last year. Also, the $US index is only 0.89 points from falling below the 100 point level.
Here's another perspective - a comparison between Gold's 2002 low and its present price and the $US index 2002 high and its present "price". All data is on CLOSING levels:
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The $US Index has definitely "had it". On the first trading day of 2003, the index rose 1.21 points to 103.47, almost certainly as a result of Japanese intervention. It has been falling ever since. The post-1995 $US index uptrend was actually broken in early December, when the $US index fell below its previous (July) 2002 low. Now, it's threatening to fall below the 100 level, last seen in November 1999 right around the time of the last Presidential elections.
The charts on this page all tell the same story. The uptrend is strong and getting stronger. On the weekly bar chart and the point and figure chart, Gold would have to fall $US 30 plus from present levels to even threaten it.
Right now, of course, most markets are more or less on hold waiting for the seemingly inevitable outbreak of war between the US and Iraq. Mr Bush's "stimulus" package has come and gone without so much as a ripple. The latest US trade deficit, for November, has been announced at about $US 40 Billion - up $US 5 Billion from the October deficit. Treasury debt, which hit the debt ceiling of $US 6.4 TRILLION on the last day of 2002, is presently about $US 17 Billion below it.
Before the end of January, we will have seen the deadline for the UN weapons inspectors, Mr Bush's State of the Union message, and the results of the first FOMC meeting of 2003. We may also have seen the start of a new US - Iraq war. All of this "should be" grist for the mill for further Gold advances.
We say "should be" because of the lingering memories of what happened to Gold at the outbreak of the last Gulf War in 1991 (see our main Gold commentary this week). That time, Gold was forced down and kept down. There may well be another attempt to force it down this time, but this time, it can't be kept down.