Right now, it could be said that the only "investment class" that HAS bottomed is $US Gold. Global stock markets show absolutely no signs of "bottoming", especially now that the Dow has fallen substantially below 10000 and the S&P 500 is at three year lows. The $US shows no signs of "bottoming" either, after surging at the beginning of this week only to give most of its gains back by the end of the week.
The charts to the left continue to consolidate. Note that the Gold price on the weekly chart is being supported by its shorter-term (20 week) moving average. On top of that, the old reliable technical indicator of the shorter-term (20 week) moving average being ABOVE the longer-term (40 week) one remains intact. This is the first pre-requisite for a Gold "Bull" market. All we are waiting for now is the $US price rise.
As stated here last week, the last thing that is holding the $US Gold price back, by making it very easy indeed to "borrow" gold, are the Gold Lease rates. The LBMA lease rates are falling inexorably with the one month rate BELOW 0.40% and one year rates now BELOW 1.50%. Lease rates have seldom if ever been lower, certainly not since Gold bottomed in August 1999.
On September 7, U.S. August unemployment was reported at 4.9%. This is a rise of 0.4% from the rate in July, it is WAY above expectations, and it is the worst U.S. unemployment number for four years. If there is anything that can fatally "dent" consumer confidence, the thing that Wall Street is counting on for a turnaround on the markets, it is a quantum leap like this in unemployment.
Don't forget, all this is happening DESPITE all the rate cuts. As we report in the current issue of The Privateer, the Japanese have already panicked, with the finance minister calling for COORDINATED currency intervention. At the rate things are going, the U.S. isn't far away from following suit.
"We've said it before and we will say it again. Physical Gold is the SAFEST investment media you can find right now. And right now, capital preservation should be the most important goal for ALL investors."
(The Gold Bottom - August 31)
Compare the charts of $US Gold here with the charts of almost ANY other type of investment "asset" and you can see the truth of this statement. Gold in $US terms is quiescent. It isn't going up - it isn't going down. All around it, paper investments are gyrating wildly with the general direction being DOWN.
The only major exception, so far, is U.S. Treasury debt paper. Most investors are still convinced that there's nowhere else to go but the U.S., and there is no "safer" U.S. investment than Treasury debt. Of course, it is both politically and economically MANDATORY for the U.S. Administration and financial establishment to perpetuate that attitude.
Now, with U.S. markets reeling and the U.S. Dollar under pressure again, they have their work cut out for them. The longer the $US Gold price remains steady, the closer it is to starting to move. And the worse the situation in the "paper markets" gets, the more certain it is that the move, when it comes, will be UP - in U.S. Dollar terms.