Meanwhile, Gold is nearly at the bottom of its uptrend. Support "should" be found between present levels and the pre 9/11 levels of $US 272-73. Will it? All we can do is wait - and watch."
(The Gold Bottom - November 16)
As you can see on the charts to the left, support HAS been found. Spot future Gold closed at $US 272.50 on Monday, November 26. That is just $US 0.20 above the level which Gold was at immediately prior to 9/11. Gold stopped going down there. The technical support is shown most clearly on the weekly bar chart to the left. It is shown even more clearly on the longer-term weekly bar chart here.
The turnaround after Thanksgiving is shown on the daily bar chart. The $US 1 x 3 point and figure chart is still sitting right on its support line. It hasn't turned up yet. An upturn on this chart would require a spot future Gold CLOSING price of $US 276.00 or more.
The other thing to note on the bar charts is that volume on the Gold futures market over the past week is up quite dramatically. However, (more on this in our main Gold commentary this week) total open interest is down - to its lowest levels since mid August.
The other thing to note about Gold trading over the past week has been a repeat of an often seen phenomenon. This is Gold's remarkable "stability" with the U.S. Dollar. Over the past week, the $US Index has fallen 1.92 points or 1.63%. $US Gold over the same period is up $0.80 or 0.29%. A Gold RISE to mirror the fall of the $US over the past week would have put Gold at $US 278.35.
Gold lease rates have spiked - especially at the short (1 month) end this week. Previous instances of this have been a sure precursor to a run up on the physical $US Gold price. And finally, since the latest Bank of England Gold Auction on November 27, the New York spot future Gold price has been lagging further and further below the London Gold PM fix. On November 30, the discrepancy was $US 1.60. The London PM fix was $US 275.50. The (December) spot future Gold close in New York was $US 273.90.
The pressure is building under Gold, that is plain to see. The introduction of the Cash Euro is now only a month away. After that, and especially when individual European cash currencies finally stop circulating in early 2002, the U.S. Dollar will have a full-blown competitor as the world reserve currency.
As the world's greatest external debtor nation, the U.S. CANNOT afford for its currency to lose world reserve currency status. Even "sharing" this status with another currency, the Euro, will surely prove highly dangerous and may well prove fatal to U.S. paper investment markets. Time is inexorably running out.
And so is the time for $US Gold to remain in the doldrums. Important support points are holding. Volume on the paper markets is increasing, but open interest is not. Gold lease rates are climbing. But as yet, the $US Gold price is not moving. Barring MASSIVE intervention, which cannot be ruled out when one is dealing with Gold, the next move should, by all technical criteria, be UP.