While the Fed was creating Dollars as fast as they could to meet the "demand" for overseas repatriation of funds, and while the Bank of Japan was buying Dollars as fast as they could to keep the Yen from soaring, Gold hardly moved at all this week on a week to week basis. On September 21, the spot future close was $US 291.90. On October 5, it was $US 292.40. Gold is just about the only "stable" investment left. So far, no plus $US 300 Gold - yet.
There are two important points to make here. First, the current "spike" on the chart is HIGHER than the previous one back in May. Second, the May spike lasted all of two weeks. In the third week, Gold gave back almost ALL of its rises of the previous two weeks. Not so this time. So far, after three weeks, Gold is still standing about $US 20 (7.4%) above its level of three weeks ago.
Now, please take a look at the the longer-term weekly Gold bar chart. You can see that NONE of the Gold "spikes" since the Washington Agreement spike of late 1999 lasted longer than four weeks before correcting substantially. If the spot future Gold price either holds close to present levels or moves higher over the coming week, it will have lasted as long as the "Washington Agreement" spike two years ago. That is perfectly natural for a move that comes at the END of a long "bottom formation".
Of course, almost everything points to the near CERTAINTY of MUCH higher $US Gold prices in coming weeks. Global economic activity has slowed drastically since the September 11 atrocity. Central Banks, notably the Fed and the Bank of Japan, have been creating new "money" at fantastic rates of speed. Despite the (almost inevitable) bounce over the past week, EVERY major world stock market is now in a BEAR phase.
Right now, the only thing that can cause a fall in the $US Gold price - at least the PAPER $US Gold price - in present circumstances is MASSIVE intervention. Demand for physical Gold remains HUGE. Gold stocks of all varieties (North American, South African, Australian) have put on by far the best performance of any asset class this year - and ESPECIALLY since September 11. Investors are noticing, there is no way to prevent them from noticing.
The only question left to be answered remains: When will $US spot future Gold hit and surpass the $US 300 level - and what happens THEN?
Gold ALWAYS provides necessary "insurance" against financial market breakdowns. There are also occasions when it provides actual - and substantial - CAPITAL GAIN. For $US holders, that time is almost here. Don't say you weren't warned.