The nadir of the Gold correction (so far?) came on Monday, April 7 when spot future Gold in New York lost $US 3.80 to close at $US 321.50. Last week, on April 11, spot future Gold was up $US 2.60 on the week at $US 327.90. This week, on April 17, Gold had lost $US 0.70 to close at $US 327.20.
As you can see on both the daily and weekly bar charts to the left, the situation has now "stabilised" with Gold in a trading range around the $US 324-328 level. This level - see the dotted line on the weekly bar chart - is the level which confined the Gold price between April and November 2002. Right now, the 40 week (200 day) moving average is about $US330.50 or $Us 3.00 above the present spot future price
Here are the relative performances of $US Gold, the $US Index, and the Dow since Gold broke above $US 300 to stay on March 27, 2002:
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In percentage terms, the fall in the $US index since Gold broke through the $US 300 barrier a little over a year ago is almost twice the rise in the Gold price over the same period. If Gold's percentage rise had duplicated the percentage fall of the $US index, Gold would now be at $US 351.40. That would be a quite reasonable level - Gold's actual level of $US 327.20 is vastly "oversold".
On the daily bar chart, you can see that Gold has been essentially "flat" for about ten days now while the shorter term (10 day) MA moves closer to the longer term (20 day) MA. The actual price crossed above both MAs on April 17, The indicator on this chart that a "bottom" to the correction is being established will be when the shorter term MA crosses back above the longer term one, a situation not seen on this chart since February 13. The weekly bar chart, the Gold price has established itself just below the horizontal (dotted) line which represents the pre November 2002 high.
On the point and figure chart, Gold has turned up from the $US 321.50 low set on April 7 but has not moved from its April 11 close. We do not yet have a genuine support formation on the chart. The senior uptrend line, anchored back at the April 2001 Gold bottom, is presently at about $US 318 with a tentative support point being the April 7 low.
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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You will find charts of the $US index and Gold here for comparison.
Looking at the moves since Gold's 2002 low and the $US index 2002 high, you can see that the percentages are much closer. Even here, however, the $US index is down in percentage terms more than Gold is up.
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In this climate, Gold is still groping for but has not yet found a solid support level from which to launch another move upward. We await a spot future close above the $US 330 level as the first solid evidence that such a point is in place. On the downside, further weakness would be indicated on any spot future Gold close below $US 320.