So here we are, having our first run at $US 600 Gold. As you will know by now, the spot future Gold price bolted up to a new bull market high on April 6, rising $US 7.30 on the day to close at $US 595.20. The spot future price has traded above $US 590 every day this week, only to fall back below that level by reversing its April 6 fall on Friday, April 7. On that day, Gold fell $US 6.80 to close at $US 588.40 - still a $US 6.60 increase from a weeek earlier.
Gold first hit the $US 490 level only four and a half months ago, on November 2. 2005. Its first spot future close over $US 500 came on December 2. But it didn't clear the $US 500 hurdle for good until December 22.
Looking longer term, Gold cleared $US 300 for good on March 27, 2002. See the table below. Its last close before $US 400 was on September 9, 2004 - almost eigheen months later. The trip from $US 400 to $US 500 took until December 2005 - fifteen months in all. And now, about three and a half months after that, we are on the verge of $US 600. It is safe to say that the Gold bull market has accelerated a LOT in the past five months.
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 just over four years ago would require a spot future Gold close of $US 604.40. We don't thing that will be long in coming. It's less than $10 above Gold's spot future close on April 6.
On the daily chart, the price broke back decisively back above both (10 and 20 day) moving averages (MA) two weeks ago. Last week, the 10-day average followed Gold up, crossing back above its 20-day counterpart. This chart is again in a very bullish situation, with shorter-term MA is comfortably above its longer-term counterpart and the Gold price comfortably above both.
On the weekly chart, the Gold price regained its shorter-term (20 week) moving average two weeks ago and has soared back above it and to new bull market highs again 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 last 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. Up until April 7, that was certainly the case. But remember, Gold lost ground last Friday too, only to bolt to new highs at the beginning of the week this week. The increased "volatility" of Gold is natural, given the fact that it is now approaching another potential resistance area - the $US 600 level.
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 5 clear "Xs" above the double top with its $US 595.20 close on April 6. 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.