Gold is up in terms of US Dollars this week - see the weekly chart on this page - but flat or down in terms of almost all other major currencies. The reason for this is, of course, the continuing slide of the US Dollar itself. As the global position of the US continues to unravel, concern is growing ever faster about the fiscal, financial, and MONETARY position of the US.
The rest of the world in general and the Asians in particular are well aware that they are exchanging the real goods produced by their export industries for US government promises to pay. For the moment, this is alleviated for the Asian nations in particular by the fact that the falling US Dollar is also making the prices they have to pay for necessary raw materials lower. But that will last only as long as $US denominated commodity prices rise more slowly than the US Dollar is falling.
And if past history is anything to go by, that won't keep going much longer.
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 second week in a row, the spot future close on the $US index (USDX) on Friday has set a new 52-week low.
On the daily chart, the shorter-term (10-day) moving average (MA) has curve back above its 20-day counterpart after briefly falling below it last week. Shorter-term MA above longer term counterpart with the Gold price comfortably above both. All systems go on this chart. .
On the weekly chart, Gold has long since broken above the downtrend (the dotted red line) which was set in the wake of the Mid may highs. The big resistance point on this chart is the $US 660 level, Gold's high since it fell away from the $US 720 bull market highs it set in mid May.
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.
A month ago, we got a downturn followed by an upturn in the same week on this chart. Three weeks ago the chart breached the $US 635 level thanks to the $US 18.50 leap on November 9.
As we said here recently - when Gold starts "gyrating" on a $US 5 x 3 point and figure chart, you can figure that it is getting unusually "volatile". What Gold has going for it at present is the grotesque "propping up exercise" being done on the stock markets, the ever weakening fundamentals for the US Dollar, and the simple fact that Gold has made major bull market runs in every November/January period since the start of the present bull market.
This week, Gold cleared the $US 645 level when it closed at $US 646.90 on November 30. The next resistance point on this chart is $US 660.