Look at the weekly bar chart. See the ".000"? That's right, Gold's cumulative move over the week of November 30 - December 7 was precisely $US 0.00. We can't remember the last time we saw that. What we CAN say for sure is that Gold's level immediately before 9/11 (spot future close $US 272.30) has proven to be a VERY important level. The price has now stalled just above it.
Well, not quite. On Monday, December 3, the spot future Gold price did rise $US 3.00 to 276.90. That was the biggest one day rise since October 12 - when Gold was just below the $US 290 level. More important, the move on December 3 caused an upturn on the $US 1 x 3 point and figure chart (on the left), thereby confirming the uptrend line on the chart.
Gold gave that $US 3.00 rise back over the next two days, then spent the rest of the week oscillating around its close of the previous Friday until, on December 7, it precisely duplicated its spot future close of a week earlier.
And, as usual, while Gold was doing precisely nothing, everything else was gyrating madly. The Dow regained the 10000 level. Treasury bond yields, after a huge fall on November 29, rose all week and went on to set new highs - raising fears that the Fed might not "come across" with another rate cut on December 11. Those "fears" were laid to rest on December 7 when the November unemployment number (5.7% - up 0.3%) came out.
Elsewhere, Enron fled into "Chapter 11" and U.S. markets proceeded to rise. President Bush let it be known that he would like a new and higher U.S. debt ceiling - the present ceiling is $US 5.95 TRILLION. Mr Bush expressed no preference, but a Congressional aide was quoted as saying that $US 750 - 800 Billion should be enough to see the Treasury through - for a year.
Japanese sovereign debt paper has been downgraded - AGAIN - by Standard and Poors. Right on cue, the Japanese reported their second quarter in a row of economic shrinkage (oops - we mean "negative growth" of course). That puts Japan in an official recession. And in Argentina, government and financial officials were last seen hightailing it for the Airport. Their destination? New York. Seems they need an emergency package from the IMF - RIGHT NOW!
The lack of movement in the price of paper Gold in the midst of all this is remarkable to behold. The noble metal is simply running on the spot - albeit a very important technical spot - as all the charts on this page illustrate clearly. We now await what happens when (if?) the Fed cuts U.S. rates to 1.75% or even 1.50% on December 11. As of December 7, T Bills (3-month Treasury paper) are yielding 1.69%. An 0.50% cut to 1.50% will be tough in such circumstances, but Mr Greenspan is nothing if not resourceful.
"Barring MASSIVE intervention, which cannot be ruled out when one is dealing with Gold, the next move should, by all technical criteria, be UP."
(The Gold Bottom last week - November 30)
That is still the case. The $US 3.00 upmove on December 3 confirmed $US Gold's support at $US 272-73. There are now very few if any "markets" left in the U.S., but when Gold did trade in something more akin to market conditions (before it was forced below $US 300 in 1997), January was often one of the best, if not the best, months of the year for Gold. If we don't get any more action this year - and there are two (and a bit) trading weeks left) - we'll see what happens early in 2002.
Two signal features of 2002. First, the CASH euro arrives. Second, the Fed runs out of "cutting room" for U.S. interest rates.