In the wind down to Christmas and short trading week next week to see out 2006, Gold didn't do much of anything this week. The small rise in the Gold price essentially reflected the small fall in the US Dollar against the other major global currencies.
The European Central Bank did what everyone expected them to do and raised their controlling interest rates by 0.25 percent to 3.50 percent on December 7. The Fed did what everyone expected them to do and stood pat on US interest rates (at 5.25 percent) on December 12. That's it for Central Bank machinations for 2006.
Two weeks ago, the US Secretary of the Treasury, Mr Paulson, was quoted as saying that he believed that a "strong" US Dollar was in the "national interest". Last week, Mr Paulson and Mr Bernanke went to China to talk with their Chinese counterparts about the US Dollar (amongst other things). Nothing much happened there, at least not for public consumption
The US Dollar did recover marginally last week, but has fallen away slightly over the week just ended. With only four trading days left in 2006, most eyes in the financial world are now turned to next year.
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:
|
On the daily chart, Gold has remained below both its 10 and 20-day moving averages this week. The shorter-term 10-week moving average has once again crossed back below its longer-term 20-week counterpart
As you can see on the weekly chart, the Gold price is now just below the 10-week moving average. Last week, the shorter-term 10-week moving average crossed back below its longer-term 20-week counterpart - for the first time since late July. That remains the situation this week.
On the point and figure chart, the week's activity is shown by the upturn on the chart after it had fallen slightly below support on Monday, December 18 when it closed at $US 614. That level now represents support on the chart.
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:
|
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.
The chart turned down again two weeks as Gold fell $US 18.60 on the week to close at $US 626.10 on December 8. Last week, the downturn was taken to the $US 615 level where it remains.
There are support points on the chart all the way from the present level to the uptrend line - the green line - presently at or about the $US 580 level. For an upturn on the chart, we need a spot future Gold close of $US 630 or higher.