"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."
(Gold - Bottom or BULL MARKET? - April 5)
This quote was from our analysis of the $US 1 x 3 point and figure chart of Gold in this section last week. Take a look at that chart now. As you probably know, Gold DID retreat below $US 300 on a spot future closing basis last week. It did that on Tuesday, April 9 when spot future Gold fell $US 1.70 to close at $US 298.80. The next day, the South African Gold miner ANGLOGOLD announced a BIG curtailing of its future Gold hedging plans and Gold popped right back again to close at $US 301.70.
The point and figure chart is now distributing RIGHT AT the top of its upchannel. In fact, it is straddling the line that forms the top of the upchannel. The high so far during Gold's sojourn at or above $US 300 has been $US 305.90 (spot future closing basis) set on April 2. If Gold can get to $US 308 or higher, then we thing that we can fairly safely say that the bull market is ON.
For another view on this, take a look at Gold's $US 2 x 3 point and figure chart. This chart is pointing straight up and is one "x" above its February 2002 high. And as you can see, it has well and truly broken above the downtrend line which joins the February 1996, February 2000, and May 2001 highs. On this chart, a Gold spot future close of $US 308 or higher would put Gold 3 "x"s above its previous high. Again, we would be prepared to call that a BULL market.
Last week, we said that Gold is at a VITAL point right now. It still is. The longer the Gold price keeps cycling around $US 300, the more vital it gets. It is obvious on all of the three charts on this page that it is getting harder and harder to hold the Gold price at or about the $US 300 level. The longer it stays there, the harder it is going to be to hold it down, and the bigger the potential for a LARGE upside move when it can't be held down any longer.
U.S. stock markets are slowly but surely weakening with the Dow slipping back towards 10000. The U.S. Dollar is just as slowly but surely weakening. As of April 12. the 2002 gain to date on the U.S. Dollar index is 0.69% (117.21 - 118.02). Gold's 2002 gain to date in $US terms is 8.28% ($US 279.00 - $US 302.10). Which is the stronger "currency"?
The $US Gold uptrend is now entering its second year. $US Gold has been frozen in place around the $US 300 level for two weeks now. Gold most definitely bottomed. Now all we need is a confirmed bull market. That was close last week. It is closer this week.