A spot future close of $US 450 on September 9. That's the highest close since December 7 last year and the eighth highest close in Gold's bull market so far - spot future Gold closed above $US 450 on every trading day between November 29 and December 7 2004 - reaching a closing high of $US 456.00 on December 3.
Gold has now risen by nearly $US 20.00 since it closed $US 430.70 on August 29, the day that the New Orleans levees were breached and the REAL devastation began and that the oil price surged $US 2.61 to an all time high of $US 69.81. By stark contrast, the oil price is down $US 5.73 over the same period. Oil is down because huge supplies of PHYSICAL refined gas and other petroleum products have been released from the world's strategic reserves. Gold is UP because all that is really available to manipulate the price is paper claims to the metal. Physical Gold demand is already outsripping available supply by about one-third.
Last week, we were still waiting for a $US 450 spot future close or one which breaches the December 2004 bull market high of $US 456. We've now got the first but we're still waiting for the second. Last year, it took until November to decisively breach highs first set in January. This year, we are nearing a high set last December. Gold's due.
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. Which of the three would you have preferred to own since March 2002?
Please note that over the period covered by the table, the $US Gold price has gone up a lot more than the $US has gone down on a trade weighted ($US index) basis.
On the daily chart, you can see the dip when the hurricane hit and the abrupt upwards reversal as the consequences of the storm became clear. Gold has been climbing slowly but steadily since then in $US terms. After briefly crossing below it, the short-term (10 day) moving average is now back above its longer-term (20 day) counterpart. The only resistance left is the $US 456.00 bull market high.
On the weekly Gold chart, the price dipped briefly below the trendline connecting the previous three highs and stopped precisely at the point where the 20 and 40 week moving averages converged. Now, the price is at a new 2005 high and the 20 week moving average has crossed back above its longer-term 40 week counterpart after having being at or below it for the past three months. That's a "buy signal" - especially if the final bull market high is taken out soon.
Gold dipped briefly below the line connecting previous highs on the Point and Figure chart too. It then crossed back above it and is now four clear "Xs" above its previous high, setting up a breakaway gap in the process. To signal a new leg on the bull market on this chart, the spot future Gold price will have to rise to $US 459 or higher without an intervening downturn. We'll see what happens.
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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Please note that in percentage terms, the $US Gold price rise is more than double the fall in the $US index.
As we have been saying since last November, the chart to watch is the indeterminate future continues to be the $US 5 x 3 point and figure chart. The uptrend line established on this chart when Gold broke above the $US 440 level in November is the final and conclusive technical evidence that $US Gold is now in the second leg of its bull market. The trendline on the chart (see the link) is a POWERFUL support for the bull.
Ever since Gold broke back below that $US 440 level after having set a bull market high of $US in early December 2004, that has been THE resistance level.
On June 16, the spot future Gold price bolted $US 7.10 higher to close at $US 436.20. That move turned UP the $US 5 x 3 Gold chart, precisely one month after it had turned down.
Gold then breached $US 440 on June 23, precisely the same level which confirmed the bull market on the chart way back in November last year. It could not go higher, and corrected down to $US 420.20 on July 19 - turning the $US 5 x 3 chart down again in the process.
On August 11, with a $US 9.00 Gold price rise (to $US 445.50), the $US 5 x 3 chart turned up again as Gold once again breached that $US 440 level. Now, almost exactly a month later, Gold has reached $US 450. One more "X" to go to equal the bull market high set back in December.
Resistance on the $Us 5 x 3 chart is, of course, at the bull market high of $US 455. Above that, $US 470 - or higher - is needed to confirm the next upleg on the $US Gold bull market.