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 348.90 on May 9. Thus, Gold has recovered $US 27.50 or just under half (47.7%) of its $US 57.60 fall. Over the past week, with the $US index falling another 1.83 points to a new 2003 low of 95.11 on May 8, Gold has managed to crawl back into the "black" for 2003. At its spot future close of $US 348.90 on May 9, Gold is up $US 0.70 or 0.20% for the year.
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 372.40. Spot future Gold's 2003 high, so far, is $US 379.00.
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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For the first time since we put this table up, the percentage fall in the $US index since March 2002 is BIGGER than the percentage fall on US stock markets (as measured by the Dow) over the same period. Gold, of course, stands in sharp contrast to both. In this situation, either the $US is vastly oversold, or US stock markets are hanging in mid air. Needless to say, we are sure that the second interpretation is the correct one.
On the daily bar chart, Gold is back in a comfortable uptrend with the shorter-term (10 day) moving average well above the longer-term (20 day) one and both climbing at the same rate. The actual price remains well above both..
On the weekly chart, there is another bullish signal this week as Gold has moved back above its shorter-term (20 week) moving average for the first time in two months. There will be some resistance at higher levels as Gold holders who bought in January/February at prices between $US 350-380 have a chance to "get out even".
On the point and figure chart, Gold has now risen nearly $US 30 since turning up from the $US 321.40 low set on April 7 but and is now back inside its post November 2001 uptrend. The bottom of this channel now stands about $US 342.343. The senior uptrend line, anchored back at the April 2001 Gold bottom, is presently about $US 320.
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.
As we point out on our $A/$US Gold comparison page, thus far, the recovery of Gold over the past month has come ONLY in $US terms amongst the world's major currencies. If the $US Gold price rise had mirrored the $US index fall since Gold hit its April 7 $US 321.40 low, then Gold would now be less than $US 10 below its 2003 highs.
Of course, with no prospect whatsoever of the Fed actually stepping in to support the Dollar by RAISING rates, and with certain prospects of further accelerating borrowing by ALL sectors in the US economy, the downward pressure on the Dollar and the upward pressure on Dollar prices will continue to increase. This would be the case even without the potential of sales of Dollar denominated assets by foreign holders.
In such a situation, the UPWARD pressure on Gold priced in $US can only continue to increase. And because the Dollar remains, for an indefinite period into the future, the "lynch pin" of the global monetary and economic system, at some point in the fall of the Dollar, the economy of the entire world will be adversely effected. That puts upward pressure on Gold in terms of EVERY currency.