The Last Gold Bear Market:
Gold fell from $US 499 to $US 325 between December 1987 and March 1993. The extent of this fall from top to bottom was 34.87%. The duration of the bear market was 5 years and 3 months (63 months).
The Present Gold Bear Market:
Gold fell from $US 414 in February 1996 to a low of $US 253 in September 1999. The extent of this fall is 38.89%. With no bull market yet established, the present bear market has lasted for exactly 5 years (60 months).
"Gold has signalled no bottom - yet. The first step is to see if the $US 260 level can hold. The second step is to see if Gold merely re-establishes itself in a $US 260-270 trading range, or if it can break above its Feb. 27 high and go on to get back above the $US 270 level. Stay Tuned."
(The Gold Bottom Last Week - March 2)
Please read that paragraph again. With its rise of $US 5.40 to $US 271.50 on March 9, spot future Gold fulfilled ALL of the criteria we laid out only a week ago. The $US 260 level held - spot future Gold closed at $US 260.90 on March 6. Then, in three days, Gold rose $US 10.60 to scorch right through the $US 260s and close for the week at $US 271.50. That is spot future Gold's highest close so far this year. The last time that Gold closed above $US 270 was on the last trading day of 2000.
Since Gold hit its 2001 spot future low close of $US 255.10 on Feb 15, it has had two good upmoves. The first took the spot future close to $US 268.40 on Feb. 27. Now, Gold has risen over $US 10 in the past three days to close at $US 271.50. Take a look at the daily bar chart. You can see that the correction between Feb. 27 and March 6 did not give back all of the previous upmove and the $US 10.60 jump since March 6 has carried Gold above the top of its previous upmove. This is a classic signal
In fact, this kind of "action" has not been seen on the Gold price since the heady days of late 1999 in the wake of the "Washington Agreement". If you want to see one of the main reasons why this has happened - check out the Gold lease rates over the past 30 days. Gold lease rates have spiked severely. When was the last time this happened? That's right - late 1999.
All of a sudden, it has become much more expensive to "borrow" Gold. In fact, the interest rate on borrowing Gold is now quite a bit higher than the rate on Treasuries of any maturity.
The fiscal situation in Japan is now being admitted to even by those who run the system. In the U.S., stock markets have taken another tumble on March 9, right after all the old bull market cheerleaders have been all over the airwaves telling everyone to get back in. Gold has had its best technical action in 18 months. We can safely say now that the bottom is IN. Look at all three charts to the left of your screen. Use the links at the top of this page to look at the two longer-term charts. The evidence is pretty well conclusive.
A Gold BULL market? Not yet in $US terms. But please proceed to our $A/$US Comparison page for an analysis of a REAL Gold bull market.