Gold did nothing on March 11, the day of the terrorist attack on Madrid. It went down the day after the Madrid bombing as "reassuring" noises were put about to the effect that the US and Pakistan were closing in on "Al Queda leaders".
But then came the Spanish elections, and the ousting of the party in power because of their policy of allying themselves with the US in Iraq AGAINST THE EXPRESSED WILL OF THE SPANISH PEOPLE. This week, Gold is up big time in terms of the US Dollar. More important by far, Gold is up this week in terms of ALL major world currencies.
Here's what we said about this last week: "This time, Gold's REAL bull market still awaits that final feature, Gold going up against ALL currencies, not just the US Dollar. There are increasing signs that this event is coming closer.
So there were, and this week, Gold HAS taken off against ALL currencies.
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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If you doubt that Gold's breaking back above the $US 300 barrier to stay in March 2002 was a "sea change" for world markets, a glance at the percentages in this table should settle the matter beyond all reasonable doubt.
The notable change in the table above is that the Dow is now back BELOW its level of March 27, 2002, when the $US Gold price finally broke above $US 300 to stay.
On the daily bar chart, you can see that Gold has once again left the $US 400 level behind it with a pattern of ascending highs and ascending lows. On top of that, the short-term (10 day) moving average has crossed back above the longer-term (20 day) one with the price well abobe both. The correction which began in mid January now shows strong signs of being over.
On the weekly bar chart, Gold trespassed below its steepest uptrend line when it fell below $US 390 on an intraday basis on March 3. Since then, it has essentially been following that trendline. This week, Gold has accelerated upwards, confirming the trendline and moving solidly above both its 20 and 40 week moving averages.
You can see a similar pattern on the point and figure chart. After "trespassing" just below the second of its three uptrend lines, Gold has broken decisively above recent consolidation. It has also broken the trend of lower highs and lower lows, as witness its break above the dotted red downtrend line joining the two previous peaks. Those two peaks are at $US 426 and $US 416. These levels now become the resistance points on the chart. Any Comex Gold close of $US 429 or higher signals the next leg of the $US Gold bull market. .\
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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Again, we repeat here what we said on this page last week:
"The action on the $US Gold price over the past month or so has forcibly reminded us of what happened back in early 1979 when Gold was struggling just below the $US 250 level for a while. Then as now, Gold had been going up against the $US but, due to $US weakness, Gold's rise against other major currencies was much more subdued."
"Back then, Gold's movements in early 1979 were a precursor to the REAL Gold bull market. Once Gold broke above $US 250, it started rising in terms of ALL currencies. The result was the historic bull which took Gold from $US 250 in late April 1979 to $US 850 in January 1980."
Gold first broke clear above the $US 400 level back in early December 2003 while the US Dollar was still plummeting against the other major currencies. Now, after more than a month of trading each side of the $US 400 level, with a brief foray below $US 390 on an intraday basis, Gold has broken clear of $US again. But THIS time, Gold is not rising on the back of a falling US Dollar. This time, Gold is rising in terms of all fiat currencies - just like it did in 1979.