"Next week, the US Treasury can borrow again with the passage on March 16 of a new debt ceiling just below the $US 9 TRILLION level. And next week two other things will happen. First, reported Treasury debt levels will be "unfrozen" and we can get our first glimpse of how much the official debt has grown since the level was frozen on February 16. Then, on March 23, the Fed ceases to report on US Broad Money (M3) numbers."
The Gold Bull Market - March 17
Last Friday, March 24, the day after the US Fed ceased reporting on its broad money (M3) numbers, the $US Gold price leaped almost $US 10 to $US 560.50. This week, punctuated by the latest 0.25% rate rise by the FOMC on March 28, the $US Gold price leaped a little over $US 20 to close the week at $US 581.80 after reaching a new bull market high of $US 586.70 the previous day.
Thus, Gold sustained its $US 540 - 570 trading range for just under two months. This week, it was decicsively broken through to the upside, thereby signalling the next leg on the bull market.
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 record, a doubling of the Gold price since the metal decisively broke above $US 300 four years ago would require a spot future Gold close of $US 604.40. We don't thing that will be long in coming.
On the daily chart, the price broke back decisively back above both (10 and 20 day) moving averages last week. This week, the 10-day average has followed Gold up, crossing back above its 20-day counterpart. As we said here last week: "The signal of another assault on the top of it will be if and when the 10-day average recrosses above its 20-day counterpart. That's what happened.
On the weekly chart, the Gold price regained its shorter-term (20 week) moving average last week has soared back above it and to new bull market highs this week. Once again, we have a perfect picture of a bull market on this chart with shorter-term MA well above its longer-term counterpart and price well above both AND at new highs.
The major addition to the $US 2 x 3 point and figure chart this week is a new and much steeper uptrend line anchored in the recent $US 540 lows. The steepening of an uptrend usually (there is no such thing as "always" in technical analysis) signals an acceleration of the uptrend. We certainly had that this week, despite the $US 4.90 fall on March 31.
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 can see the abruptness of Gold's recovery from its mid-December and mid-February corrections on the strategic $US 5 x 3 point and figure Gold chart. But the most recent retreat from the $US 570 level gave us a correction with a difference. That downturn gave us a double top on the chart.
Now Gold has broken above that $US 570 double top. More, it has broken 3 clear "Xs" above the double top with its $US 586.70 close on March 30. That decisively breaks above the recent trading range and also signals two things. The first is a new upleg on the bull market. The second is a likely acceleration in the pace with which the $US Gold price rises. This is signalled by the break above a double top, usually a sign of weakness on a point and figure chart.