Last week, the spot future Gold price fell $US 4.70. This week, the price rose $US 1.00. The intra-day spread for the week - again on a spot future basis was high $US 270.20 - low $US 265.90. The $US Gold price is now trying to establish a support point in the mid $US 260s - just like the one it established a month ago.
The first item of note about Gold trading over the past week is the fact that Gold actually ROSE - by $US 2.20 - on July 11, the day of the latest Bank of England Gold Auction. That is a "first" for BoE Gold auction days.
The second item of note shows up on the weekly $US Gold bar chart. For the first time since June 2000, and for only the third time since the Gold "bear" began in February 1996, the shorter-term (20 week) moving average has moved back ABOVE the longer-term (40 week) moving average.
The first of these crossovers took place in early 1998, shortly after Gold had fallen below the $US 300 level and just before a rally which took Gold - temporarily - back above that level. The second crossover took place in the wake of the "Washington Agreement" Gold spike of Sept/Oct 1999.
Now - as of July 20, 2001 - we have a third crossover. This one is taking place as Gold is trying to establish a support zone (in the mid $US 260s) which is HIGHER than the mid $US 250s support zone it established back in early April. You can see these two support zones on the weekly bar chart on this page.
If you refer again to the weekly $US Gold bar chart, you will see that Gold has NOT managed to establish "higher" support zones since it retreated from the "Washington Agreement" spike nearly two years ago. If it manages to do so now, in conjunction with the moving average crossover already discussed, the combination will be the strongest signal yet that the long bear market since 1996 - and the long bottom formation since 1999 - is coming to an end.
Right now, $US Gold is "neutral" between $US 265 and its June 26 high of $US 276. BELOW $US 265 - the danger is that the present support zone will not hold. ABOVE $US 276 - Gold will signal that the higher support zone has been established. If that happens, major resistance comes at the May 18 spot future close of $US 287.80 and - above that - AT $US 300.
Our next "Gold Bottom" commentary will be written on the eve of the G-8 Heads Of State Summit in Genoa, Italy. There is a brand new "currency crisis" to discuss there, the one presently taking place in Latin America. We do NOT expect a runaway Gold price in the lead up to this Summit - it wouldn't look good. But after the summit? Well, let's just say we look forward to that.
Stay tuned, Gold is definitely "bubbling under" at present.