If one wants to understand the tenacity of those who advocate the ownership of Gold and the necessity to re-introduce Gold as MONEY in the world, one need look no further than the events of this past week. In Lebanon, under the farcical pretext of "defending themselves" Israel is laying waste to an entire nation. In the US, the Administration and the Congress fall all over themselves praising the "heroic" actions of the Israelis while over on the futures markets, the "funds" attack the Gold "price" as set on those futures markets.
All of this, and much more besides, is being done to "preserve, protect and defend" the power of an empire which is crumbling almost as fast as its life-blood, its financial system and its MONEY, is being debauched to perpetuate that power.
As you can see on the weekly chart to the left, spot future Gold has fallen nearly $US 50 this week. Almost ALL of this fall has been "accomplished" on US futures markets, the vast majority of it during the time when all other futures markets were closed for the day. Yes, the manipulation is blatant, but so is almost everything else which is being done by those clinging to power. It's a dirty business, and it is always the innocents who suffer most.
If people are to live together peacefully, they must must be able to own what they earn and trade it without let or hindrance. To do that, they must have an HONEST medium of exchange. That has always been Gold. We who respect Gold respect it because of what it represents. Political freedom, economic liberty, international amity and an honest medium of exchange are interdependent. Remove one and, over time, you remove all. The world has not had ANY even semi-honest money for almost 35 years. There's not much freedom, liberty or international amity left, is there?
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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Gold is down nearly $US 50.00 against a US Dollar which hardly moved at all this week.
On the daily chart, the Gold price snapped back above both its 10 and 20-day moving averages three weeks ago. Two weeks ago, the 10-day average has crossed back above its 20-day counterpart. Everything was in place for the resumption of the bull market. This week, the 10-day moving average remains above its 20-day counterpart, but the Gold price has fallen back below both of them.
On the weekly chart, Gold crossed back above its shorter-term 10 week moving average last week, reflecting the situation on the daily chart. This week it has performed an abrupt about face, falling back below both moving averages while the 10 and 20 week MAs converge. Further weakness in coming weeks will see the shorter-term average dip below its longer term counterpart.
Last week, Gold had almost regained its steepest uptrend line on the $US 2 x 3 point and figure chart, the line which shows the steepening of the bull market which began late last year. As you can see, the about face this week has been abrupt. On this chart, support is at or about present levels. If Gold continues to decline, the nest major support (aside from the psychological $US 600 level) is at or about $US 580.
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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As always, we refer you to the strategic $US 5 x 3 point and figure Gold chart for an overview on the situation.
As we said here on May 12: "We don't know where the next downturn on this chart will take place. It may well take place from $US 720 since Gold has now reached the last but one of the resistance points on the way to its all time $US 850 high. We'll see. But whatever happens, the bull market is - to put it mildly - perfectly intact."
The downturn came, with a vengeance, from the $US 720 level and the Gold price re-entered the channel which confined the bull market until the breakout in late March this year. Now, it has well and truly broken above the upchannel again.
As we said here three weeks ago - "The first resistance point on this chart is the top of the upchannel around the $US 615 level. Gold smashed right throught that level to reach $US 665 on the $US 5 x 3 chart. This week has seen an abrupt downturn with Gold almost back down to that $US 615 level and (just) back inside the upchannel. As on the $US 2 x 3 chart, support is at present levels and below that, at $US 600 and $US 580.