Last week, Gold hit the $US 685 level. This week, it has breached the $US 690 level closing at a new 2007 high of $US 692.00 on April 20. It has been slow progress so far, especially considering the weakening US Dollar, but Gold has now broken through all resistance points EXCEPT the $US 721.50 spot future close bull market high it set last May.
Please note that it is now more than eleven months since Gold hit that May 2006 high. This is the longest period in the bull market so far during which Gold has failed to hit a new high in US Dollar terms. That, amongst other things, is the reason why the talk of a gold "bull market" has died down in recent months in the mainstream financial media.
There is still very little mention of Gold, bull market or not, in the mainstream financial media. That remained the case this week as US and world stock markets continued to surge, the Dow hitting new all time highs and the other major indices hitting six year highs.
As we stated here last week, the only ingredient yet to enter the mix is growing concern amongst Americans themselves about the future of the US Dollar. That is changing, slowly but surely, as the US Dollar plumbs new lows this week and as concern grows over the Fed's inability to "protect" the US Dolalr with higher interest rates.
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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This week, the US Dollar has dipped to two year plus lows while the $US Gold price has set new 2007 highs.
As you can see on the daily bar chart, Gold has risen for the seventh week in a row this week and has now reached new 2007 highs. The shorter-term 10 day moving average (MA) is comfortably above its longer-term 20 day counterpart with the spot price remaining substantially above both.
On the weekly chart, the Gold price remains above both 10 and 20-week moving averages just as it has throughout 2007 to date. Essentially, this chart is climbing slowly but surely, having now reached new 2007 highs. Above that, there remains the May 2006 bull market high of $US 721. That's about 4.0 percent above Gold's present level.
On the point and figure chart, the $US 39 fall on the Gold price two months ago set up a new distribution area which pushed sideways towards the uptrend line on the chart. Now, the chart has broken above this distribution zone and is forging higher. This week, the uptrend line on the chart has been re-confirmed with Gold's $US 692.00 close on April 20.
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.
The big Gold price falls in early March brought about the first downturn on this chart since the beginning of January. The January downturn found a bottom just above the $US 600 level. The March reversed itself at the $US 640 level. The spot future Gold close of $US 655.50 on March 8 turned the $US 5 x 3 chart up again.
This week, the chart added another "X" on the upside when Gold closed above the $US 690 level on April 16 and again on April 20.
The potential "double top" which was on the chart last week has now been negated by Gold's climb to above $US 690 this week. We are now looking for a price above the $US 700 level which would put the chart three clear "Xs" above its previous (February 2007) high.