The Last Gold Bear Market:
Gold fell from $US 499 to $US 325 between December 1987 and March 1993. The extent of this fall from top to bottom was 34.87%. The duration of the bear market was 5 years and 3 months (63 months).
The Present Gold Bear Market:
Gold fell from $US 414 in February 1996 to a low of $US 253 in September 1999. The extent of this fall is 38.89%. With no bull market yet established, the present bear market has lasted for exactly 5 years (60 months).
The highest spot future Gold close of 2001, so far, has been $US 270.00 on the first trading day of the year, January 2. Early this week, Gold staged another run at that $US 270 level but didn't quite make it. Spot future Gold closed as high as $US 268.40 on Feb. 27, but closed the week well down at $US 263.10.
However, as you can clearly see on all three of these charts, $US Gold has made a significant turnaround this week. Two weeks ago, most Gold commentators were bewailing the fate of Gold and confidently predicting that it would plummet to $US 200 and points south. Now, Gold has rallied by $US 10 in the three trading days between Feb. 22 and Feb. 27. We haven't seen "excitement" like that in the Gold market since mid 2000.
Since, Feb. 27, about half of those gains have been given back, with spot future Gold closing on March 2, at $US 263.10. BUT - note the moving average crossover on the daily chart. That's the first (admittedly tentative) "bullish" technical evidence we've seen for months.
Around Gold, most world markets are in very "tender" condition. Asian stock markets have fallen, the Japanese market has plummeted, as has the Yen. On U.S. stock markets, the Nasdaq is a corpse, the S&P 500 is threatening to establish an official "bear" (by falling 20% from its highs), and the Dow? Well, it's hanging in there, still comfortably above the vital 10000 level.
U.S. financial authorities have one hand on Gold's "head" to push it down and the other underneath the backside of their stock markets to try to hold them up. We can only hope, for their sake, that they remember which hand is which.
Gold has signalled no bottom - yet. The first step is to see if the $US 260 level can hold. The second step is to see if Gold merely re-establishes itself in a $US 260-270 trading range, or if it can break above its Feb. 27 high and go on to get back above the $US 270 level. Stay Tuned.