Well, April is now three weeks old and Gold has been trading ABOVE $US 300 almost the entire month. The problem is, of course, that it is still only just above $US 300. Since Gold poked its nose above $US 300 back on March 27, here are the weekly spot future closes:
Here are the equivalent closes on the U.S. Dollar Index:
One of our daily studies on our Gold This Week (GTW) pages is a series of charts comparing the movements of the $US Index and the $US Gold price. This week, we added a chart showing the relative movements of the two since the start of 2002.
So far this year, Gold is VASTLY outperforming the $US as an investment. It would have done so even more if Gold had not remained frozen in place for the last three weeks while the $US index has been dropping, and especially over the past week when the drop accelerated dramatically.
On the charts to the left, you can best see how Gold has been dancing around $US 300 on the daily bar chart. Note on this chart that the shorter-term (10 day) moving average has come right back to the longer-term (20 day) moving average. That's just another way of showing that the price has been marching resolutely sideways for the past three weeks.
The other interesting chart, and it is getting more interesting all the time, is the $US 1 x 3 point and figure chart. This chart is merrily straddling the TOP of its up channel, which just happens to be right around the $US 300 level. This started at the end of March when Gold popped back above $US 300, and it has continued from there.
Now, to complete the picture, take a look at two other charts. The first is the "strategic" $US 5 x 3 point and figure chart. The first thing to notice about this chart is that it will not even turn down unless Gold closes below the $US 290 level, and spot future Gold has not done that since February 4.
Now, take in the entire chart. Consider Gold's previous lows in 1982 and 1986. You can see that Gold was "oversold" at both those turning points, it did not dwell at its lows but simply spiked down, turned right around, and began a bull market. The current low is VERY different. Gold has been chopping around between $US 250 and $US 300 ever since late 1997 - that's 4 1/2 years ago. This is one long, drawn-out bottom formation compared to the previous downward spikes. It is also a hell of a base for the next bull market.
The other chart is the $US 2 x 3 point and figure chart. This covers Gold back to its 1996 peak. On this chart, it is utterly clear that the downtrend has been smashed. It is equally clear that Gold is now distributing around the $US 300 level. All that is left for a definitive $US Gold BULL market is for the price to continue up from here. A spot future close of $US 308 or higher would give final confirmation on this chart that Gold had distributed above its downtrend and broken out to the upside. That's all we need to CONFIRM the bull market.
We've been waiting for a month, but we always said that $US 300 would be a VERY tought nut to crack. We can wait a little longer. Stay tuned.