"Gold has certainly not yet come back to life, but it is now lying there with at least one eye open. Consider the charts on the left."
(Gold Bottom Commentary - April 20)
Please consider them again, because they have all improved from last week. Last week, the moving averages (10 and 20 day) on the daily bar chart crossed over. This week, the crossover has widened and Gold has surged above both averages. On the weekly chart, the price has risen to the longer-term (40 week) moving average. The third chart is the Point and Figure chart. This chart does NOT take intraday moves into account, but charts on closing prices only. You can see that the narrowing "V" has now been well and truly penetrated to the upside.
The two bar charts DO take intraday moves into account. On Friday, April 27, the spot future Gold price opened "gap up" at $US 267.00 and reached a high of $US 267.50. Then, gravity, the proximity of a G-7 meeting, and a rampant $US took hold. Gold closed for the day at $US 264.10, a fall of $US 0.10. Not bad for a day when the $US Index< surged 1.21 points.
Gold lease rates are getting restless too. There have been two spikes at the short end this week, the latest on April 27. You can see on the daily chart that Gold lease rates have been continually attempting to go higher ever since the beginning of March. They are trying yet again.
As we explain in the upcoming issue of The Privateer (published on April 29), the U.S. is going to have a battle on their hands at the G-7 and IMF/World Bank meetings in Washington over the next week. The U.S. needs to keep its credit expansion going at all costs, the Europeans are not playing the game, and the U.S. Dollar is the meat in this sandwich.
Right now, $US Gold has support at almost all levels between $US 260 and $US 250. On the upside, spot future Gold has only closed above the $US 270 level twice this year - on March 9 and 12. Any close above $US 270 would be significant, but to get to the point where Gold shows a gain on the year, it is going to have to close above $US 273.60 - its close on the last day of trading (December 29) in 2000.
As any experienced investor will tell you, the BEST time to get established in ANY investment is during the calm before the storm. The only mistake you can make is to hold on after you have been proven wrong. Any Gold price below $US 250 would prove us wrong. That's not a big risk to take, especially in light of the state of the paper investment markets right now.
The most significant indicator yet is the fact that on April 27, Gold opened "gap up" on a day when the $US index surged. Technically, there is no doubt that Gold is MUCH better placed for an upside surge than is the U.S. Dollar. Monetarily and politically, the U.S. MUST prevent such a surge if it wants to keep the Dollar as the world's "preferred" investment and thereby keep its credit expansion going. That's what the meetings in Washington will be "discussing", but don't hold your breath waiting to read about it in the mass media.
And finally, there are increasing signs that Gold stocks - in North America, South Africa, and Australia - are starting to wake up. More on that in our $A/$US Gold Commentary