The spot future Gold close in New York has stayed within $US 5.00 of the $US 600 level on every trading day this week. As you know, US markets were closed for the Good Friday holiday in Asia on April 14. On that day, Gold trade in Asia took the metal to $US 599.50. Here we are at the $US 600 level, less than four months after Gold reached the $US 500 level last December.
It took almost exactly two years - from March 2002 to March 2004 - for Gold to rise from $US 300 to $US 400. It took another twenty-one months - from March 2004 to December 2005 - for Gold to rise from $US 400 to $US 500. Now, on April 14, 2006, less than four months after the last spot future Gold close below $US 500 ($US 493 on December 22, 2005), here we are at $US 600.
Granted, US spot future Gold has not yet close above $US 600, and we could yet see a correction at this level which could take more time to resolve itself. The fact remains, however, that Gold's rise in terms of ALL world paper currencies, not just the US Dollar, is accelerating rapidly.
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:
|
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. With Gold now having reached the $US 600 level in Asia, we don't think that will be long in coming
On the daily chart, the price broke back decisively back above both (10 and 20 day) moving averages (MA) three weeks and nearly $US 50 ago. Two weeks, 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 three 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. Some increased "volatility" might be expected given the fact that Gold is at another potential resistance area - the $US 600 level. As you can see on the chart, there is no evidence of it. The chart simply points straight UP.
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:
|
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.