On a spot future closing basis, Gold fell from $US 379.00 on February 4 to $US 321.40 on April 7. It's high so far during its recovery has been $US 342.40 on May 1. Thus, Gold has recovered $US 21.00 or a little over one third (36.5%) of its $US 57.60 fall. However, at its close of $US 341.30 on Friday, May 2, spot future Gold is still showing a 1.98% fall on the year. Spot future Gold began 2003 at $US 348.20.
The BIG item, as far as Gold and everything else is concerned, is the new 2003 LOWS plumbed by the $US index this week. On May 2, the $US index closed at 96.94 - a 5.20% fall from the 102.26 level at which it began 2003. If Gold had "mirror imaged" the fall in the $US index thus far in 2003, in other words, if it had remained stationary against the currencies of the major trading partners of the US, then it would now be trading at $US 366.30.
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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Spare a thought for a "foreigner" (especially a European or a Canuck or an Aussie) who bought Dow stocks in late March 2002 at the beginning of the period covered in this table. The percentage fall on the Dow is bad enough, but combine that with the percentage fall on the $US index, and the losses are MUCH worse.
In percentage terms, the fall in the $US index since Gold broke through the $US 300 barrier a little over a year ago is much bigger than 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 358.00.
On the daily bar chart, the signal that Gold has found solid support is that the shorter term (10 day) moving average (MA) is now comfortably back above the longer term (20-day) one with the Gold price being above both.
On the weekly chart, Gold has bounced off the horizontal dotted line which marks Gold's pre December 2002 high. Gold is now comfortably above the longer-term (40 week) MA and threatening the shorter-term (20-week) MA.
On the point and figure chart, Gold has turned up from the $US 321.40 low set on April 7 but and is now back to the bottom of its post November 2001 uptrend. The senior uptrend line, anchored back at the April 2001 Gold bottom, is presently about $US 320.
Finally, the best indicator of all that Gold has now found the bottom of its recent correction is this upturn on the strategic $US 5 x 3 point and figure chart.
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.
This week. the $US index set new 2003 lows and confirmed the next leg of its BEAR MARKET. As stated at the beginning of this analysis, $US Gold has only recovered just over one-third of its 2003 correction and is still below the level at which it started the year. Nonetheless, it is firmly established in a BULL MARKET - one that began just over two years ago with spot future Gold at $US 255.
Mr Bush has declared an "end to hostilities" in Iraq but has NOT declared "victory". To do so would bring with it responsibilities under international law which the US (and its Allies) - as the victors - do not want to execute. The domestic US economy is now regaining its pre-war status as issue number one. Thus far, Wall Street is managing to ignore dire economic indicators including rising unemployment, rampant and increasing deficit spending, and a fast fading Dollar.
Technically, and until otherwise proven, Gold is now in a potential almost $US 60 "trading range" between its Feb 4 2003 high of $US 379 and its April 7 2003 low of $US 321.40. The lower the Dollar goes, the shorter-term this trading range will be. The $US index has already confirmed a new DOWN leg on its BEAR market. A new UP leg on the Gold BULL market awaits a spot future close above $US 379.