A short week for Gold and all other US markets this week, neatly bisected on Wednesday by the July 4 Independence Day holiday. Gold started the week with a leap of $US 8.30 on July 2 as the US Dollar index (USDX) stumbled to a new 52-week low. It then proceeded to give back all those gains on July 3 and 5 only to rally in late trading on Friday (July 6) to close at $US 654.80 - up $US 3.90 on the week.
Gold turned around fairly abruptly late last week and continued that upsurge on July 2, only to fall back again in thin trade on the day before and the day after the July 4 holiday. Unlike last week, however, Gold did manage a gain this week. Having now passed through the seasonally "weak" period of May/June, Gold is entering what is usually a seasonally very good period between now and early/mid September.
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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After managing to exceed it for most of the past month, the percentage rise on the Dow in this table is below the percentage FALL in the $US index over the same period. Please note that the $US index close of 81.17 set on July 2 is its lowest since the end of 2004.
This week, the spot future Gold price briefly dipped into the $US 640s in intraday trading but managed a small gain on the week. On the daily chart, please note the quite wide intraday spreads in trading on July 5 and 6. The Gold price ended the week above both the 10 and 20-day moving averages. And once again, the shorter-term MA is curving up to cross back above its longer-term counterpart.
On the weekly chart, the shorter-term 10 week MA crossed below its longer-term 20 week counterpart for the first time since last October two weeks ago. This week, that situation remains the case. The only change on the weekly chart this week is that the spot price has moved closer to the two moving averages.
The situation on the point and figure shows clearly how hard the Gold price has been pushed down since it hit $US 690 twice in April. The first and most obvious feature is that the Gold price has now fallen BELOW the uptrend line on the chart. Please note that this uptrend line does NOT stretch back to the beginning of the Gold bull market but it does stretch back to August/September last year. Gold continues to distribute below this line. It is basically going sideways on this 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:
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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.
Then, Gold closed above the $US 690 level twice - on April 16 and again on April 20.
Since then, Gold fell as low as $US 653.30 on May 24 only to reach the $US 670 level on June 1 and turn up again. Then we had another DOWNTURN on the chart due to the $US 14.60 fall on June 8. The close below $US 645 on June 27 added another "O" to the chart last week. An upturn requires a spot future close of $US 660 or better. Please note that Gold "almost" made it this week, closing at $US 659.20 on July 2.