On a spot future basis, Gold has now closed above the $US 300 level for seven straight days.
Admittedly, the spot future close of $US 300.10 on Friday, April 5 is about as close to $US 300.00 as you can get without going back under it, but nonetheless, $US 300 is still holding on a closing basis. Back in February, Gold spent three days above $US 300. This time, it has spent seven days, so far.
For a viable uptrend to be established technically, we need higher highs and higher lows as it advances. A glance at the longer term weekly bar chart will show that this is precisely what has been established since the bottom in April 2001. In the case of $US Gold, we have a special consideration to promote the present uptrend into a genuine BULL market, and that is the $US 300 barrier. That barrier has not - yet - been decisively broken though, but we are closer now than at any time since Gold slipped below it way back in November 1997.
Looking at the charts on this page, the situation is best summed up by the $US 1 x 3 point and figure chart. You can easily see the uptrend (the green line). You can also see the "top" of the uptrend - designated by the dotted black line. Gold has poked above this line twice: In February when it climbed above $US 300 and now when it has again climbed above $US 300.
In February, Gold retreated back below the line when it retreated back below $US 300. So far this time, Gold has retreated back to the line but it has not yet gone below it. As long as Gold remains at present levels ($US 300.10) or higher, it won't go below it.
If Gold keeps going down next week and retreats below $US 300, it will be back below the line. If Gold STOPS going down next week and starts climbing, then the line will hold. And if that happens, and if Gold can climb higher than its closing price on April 2 ($US 305.90) - and preferably above $US 310, then we WILL have distribution above $US 300 and we can say with almost perfect safety that Gold IS in a bull market.
In short, Gold is at a VITAL point right now. The spot future Gold closing price can slip back below $US 300 withoug threatening the uptrend in any way. But if it does NOT slip below $US 300, and goes on to exceed its recent highs, then we have a formation not seen on the $US 1 x 3 point and figure chart since Gold began its present uptrend in April last year. That formation is distribution ABOVE $US 300. And that is what we have been so patiently waiting for.
The significance of $US 300 right now is one of timing. If it holds and then Gold goes on to set new highs in the present uptrend, the BULL market is validated. If that happens, the potential for a BIG upmove increases greatly. If $US 300 doesn't hold, then it is more of the same - more consolidation within the uptrend before a decisive breakout can occur.
Needless to say, we will be updating this page as soon as the present situation is resolved, one way or the other. We are not going to "predict" a move one way or the other. We are not going to tell you what "should" happen, we are simply going to wait and see what DOES happen.
The uptrend is solid and almost exactly one year old. $US Gold has most definitely bottomed. Now all we need is a confirmed bull market. Watch this space.