Please note what we have to say in "The Present Gold Bear Market" above: "While the $US 13.80 leap on May 18, 2001 confirmed the bottom ...".
The "action" on $US spot future Gold this week was VERY interesting. The "touchstone" (and we have more to say about this on our main Gold commentary page) was the Bank of England's Gold auction which took place in the middle of the week on January 16. Suffice it to say here that the "settlement price" at the BOE Auction was $US 283.50. Spot future Gold closed on that same day, only hours later, in New York at $US 287.60. But it closed the week on January 25 $US 0.10 BELOW the BOE settlement price at $US 283.40.
You can see this action clearly on the daily bar chart - the top one. Gold spiked up in Asia on January 16 - as high as $US 290. Then, as the BOE Auction approached, it swan dived. But no sooner had the Auction taken place than Gold turned on a "dime" and powered right back up in New York. Can't have that!. Gold duly subsided for the rest of the week. So, this weekend, the BOE can "proudly" bost that they sold another 20 Tonnes of Gold for "more than" the present spot future price.
Technically, all three charts here are in perfect shape. The only "deterioration" is that the daily bar chart has dipped back below its shorter-term (20 day) moving average. But as you can see on the chart, it has done that regularly over the past month or so.
Both weekly bar and point and figure charts merely have quite normal downturns. With Gold, as with ALL other investments, the TREND is your friend. We harp on this, we know, but look at the trend. It is still UP - just as it has been for nearly a year now, ever since late April 2001.
For the record, U.S. spot future Gold gave up almost exactly half of gains of January 7-11 this week. Last week, spot future Gold gained $US 8.50. This week, it lost $US 4.30. Again, perfectly natural, especially since the "high" price at the start of the week gave those who bought at the top of the May 2001 spike and in the aftermath of nine-one-one a chance to "get out even".
On the weekly bar chart - and on the point and figure chart - support lies between $US 277-280. On the upside, Gold has to break above $US 288 to exceed its May 2001 spike and above $US 294 to exceed its nine-one-one spike. Above $US 294 stands $US 300.
Two further technical points:
Please refer to this chart - the $US1 x 3 point and figure chart The chart has turned RIGHT ON the trendline connecting the "Washington Agreement high of Sept/Oct 1999 and the high of February 2000. This is STRONG resistance and the chart would be expected to turn here. But note that the price move up to $US 293 after nine-one-one penetrated this line. Another penetration and Gold would be fully ready to move higher - possibly very quickly.
Now, please refer to this chart - the long-term $US5 x 3 point and figure chart An upturn on this chart would require a spot future Gold close of $US 290 or higher. ANY close above $US 290 would make a run at the $US 300 level as sure a bet as there is in markets.
Meanwhile, the latest BOE auction is now history. The charts are all perfectly intact. The trend for $US Gold is still UP. And the fight for Gold to get back above $US 300 is still on.