On Friday, December 14, the spot future Gold price rose $US 4.10 to close for the week at $US 278.00. This was Gold's biggest one-day rise since September 14 - when Gold had its first chance to react to the events of 9/11. A week later, on December 21, spot future Gold rose $US 2.00 to close at exactly the same $US 278.00. In the interim, of course, Gold climbed as high as $US 280.40 on December 18 only to be knocked down $US 4.90 the next day in New York trading. But as already stated, the weekly "washup" was a "move" of exactly $US 0.00.
The action during the week has improved all the charts on this page. The daily bar chart did not dip below its moving averages (20 day and 40 day) and the shorter term average remains comfortably above the longer term average.
On the weekly bar chart, the moving average crossover (shorter-term back above longer-term) took place way back in July and remains firmly intact. As we have pointed out often, a pre-requisite for a sustained Gold upmove is for the shorter-term (20 week) MA to be above its longer term (40 week) counterpart. Also on this chart, the uptrend line is intact, after Gold dipped briefly below it during the week of December 10 - 14.
Finally, there is the Point and Figure chart. This chart is building a base for a sustained upmove. The uptrend line is intact and there is a double bottom on the chart. A close of $US 279.00 or higher would turn this chart up again, and any close above $US 283.00 would signal a new upleg on the chart.
The other item of note on Gold this week was the fact that the Gold price in $US held its ground despite the fact that the U.S. Dollar itself rose substantially. You can see this on the Gold/$US Index comparison chart. The result, of course, was that Gold firmed in terms of almost all other paper currencies.
Right now, the U.S. Administration is juggling an increasingly desperate search for Osama Bin Laden, a "stimulus package" mired in Congress, a request by the Treasury to Congress to borrow $US 750 Billion over the next two years, an Argentinian financial crisis, and stock markets which are being held up by main force and GIGANTIC amounts of introduced "liquidity". All this and a requirement to control the $US Gold price too? They have too much on their plate. Something, or perhaps several things at once, is bound to give.
There are five or so trading days left this year. In the new year, the cash Euro makes its debut at exactly the same time as the U.S. government plans to go deeply back into "deficit spending".
As we said in this commentary last week: "Gold is straining to rise. We do not believe that the dam can be kept closed much longer. And technically, the picture is PERFECT." We have nothing to add this week, except to say there is even more pressure on the dam, and the technical picture for Gold has improved further even in $US terms, and it is MUCH better in terms of all other paper currencies.
A very Merry Christmas to all reading this page.