Spot future Gold ended 2007 at $US 838.00. That's a rise of exactly $US 200 on the year, a gain of 31.35 percent. And that is the biggest gain in percentage terms since Gold rose by well over 100 percent in 1979.
In fact, spot future Gold's high for the year - and for the current bull market - was $US 842.50, it's close on December 28. There was a slight pullback on December 31, reflecting a USDX which rose almost 0.50 on the day to close 2007 at 76.70 points.
Here are the relative performances of $US Gold, the $US Index, and the Dow since Gold broke above $US 300 to stay on March 27, 2002:
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The USDX has now closed below the vital 80.00 level since September 7 and fell to the lowest point in its history - going all the way back to March 1973 - on November 22. Gold prices have now remained above the previous ($US 721.50) bull market highs they set back in May 2006 since September 19.
At its year-end close of $US 838, Gold is only $US 12 below its highest SPOT close ever, the famous $US 850 set on January 21, 1980. The $US 838.00 close is, however, a spot FUTURE close and the high for Gold spot futures is $US 873.50 - also set on January 21, 1980. As we enter 2008, Gold in $US terms is now $US 35.80 or 4.10 percent below its all time high.
With Gold up $US 38 since its close on December 20, the 10 and 20-day moving averages (MA) on the daily bar chart have once again turned up with the shorter-term average back above the longer-term one. This chart is "all sytems go" for a challenge to the spot and spot future all time highs for Gold early in the new year.
On the weekly bar chart Gold had been in a $US 645-690 trading range for the whole of 2007 until early September. The spot future Gold price closed above $US 700 for the first time since May 2006 on September 7 - the day the USDX dipped below 80.00. Gold closed above the $US 800 level for the first time in this bull market on November 2. There were then two attempts to challenge the old $US 850 high, both of them falling short and correcting. This week, Gold has mounted a third challenge with its new bull market high on December 28. Please note that for the first time in the past six weeks, Gold's weekly lows did NOT dip down to the shorter-term (10 week) moving average.
On the point and figure chart, Gold has broken above its fairly large distribution zone about $US 20 each side of the $US 800 level. The close above $US 842 on December 28 has established a new and much steeper uptrend line on the chart. There is now SOLID support on this chart at the $US 800 level.
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.
This chart is a superb example of the value of point and figure charts for showing LONG TERM trends in a market. Please note the simple fact that the $US 20 fall in the spot future Gold price on August 16 brought the chart right back to the uptrend line which stretches right back to the beginning of the bull market. Gold turned right there, and rose almost $US 100 in a straight line with no corrections whatsoever.
Before the present run up, Gold's 2007 high was just above the $US 690 level. It closed above that level twice, on April 16 and again on April 20. That gave us the double top on the chart.
The spot future price broke above that $US 690 level in early September went on to breach the $US 745 level with its close on October 1. And then, we had a downturn on the chart with Gold's close below $US 730 on October 2 and 3.
Then, Gold closed above $US 760 on October 18 and 19. This is three clear "Xs" above the previous high and produced a HUGE breakaway gap, by far the biggest in the whole history of the current bull market stretching back to 2002. Gold then continued to rise on the chart, rising to and above the $US 800 level on November 2 and then reaching $US 835, only 3 "X"s below its 1980 all time high.
That's when the Gold price started getting "volatile" - in both directions. A little over two weeks ago, we had yet another downturn on the chart when the Gold price fell $US 20 on December 13-14. And as we said here shortly before Christmas: "The BIG distribution zone is coming to a point. The price will have to break out of it soon. The only question is, in which direction?"
Now, that large distribution zone has definitely been broken - TO THE UPSIDE. Gold is now one "X" above its November 2007 high on this chart. We are looking for the chart to gain three "Xs". That, if it happens (and it's just a matter of time), would put Gold at or above the $US 850 level.