Here's the rebound - not as big as most "goldbugs" would like since Gold has not yet got back to its early June highs. We detect a degree of impatience, especially given the "tanking" of the U.S. Dollar over the past week, so it is time to put everything in perspective
Gold has been trading above $US 300 since March 27, nearly three months ago. Perspective number one is the simple fact that Gold has now definitely consolidated ABOVE $US 300 - something it failed to do between November 1997 and late March 2002.
Now, here are the relative performances of $US Gold, the $US Index, and the Dow since Gold broke above $US 300 on March 27:.
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As you can see, Gold's gain in $US terms is slightly lagging the loss on the $US index since Gold broke above $US 300 on March 27. If Gold's gain had exactly mirrored the loss on the $US index, Gold would have closed on June 21 at $US 328.16. Gold's June 4 2002 high (spot future closing basis) was $US 327.80. We threw the Dow in to show just how bad the performance of U.S. stock markets have been since Gold cracked $US 300. The performance of the S&P 500 and the Nasdaq have been MUCH worse.
Here's another perspective - a comparison between Gold's 2002 low and its present price and the $US index 2002 high and its present "price". All data is on CLOSING levels:
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As you can see, Gold is substantially further above its 2002 low than the $US index is below its 2002 high. And how has the Dow done? Well, its 2002 high close was 10635 set on March 19. It is now (June 21) at 9254. That's a fall of 1381 points or 12.99%
On the charts to the left, you can see that all trendlines are intact and that Gold is back above all moving averages on both the bar charts, including the short-term (10 day) moving average on the daily chart. Technically, the vital resistance area is now $US 330 for Gold. You can see this especially clearly on the $US 1 x 3 point and figure chart. $US 330 is $US 3 (therefore 3 "X"s) above Gold's previous high close. A rise to this level would indicate that Gold has broken through the resistance from its previous high, and is almost certainly headed UP from there.
Please scroll up to the top of this analysis and click on the link labelled "Monthly bar chart back to 1975". In May, Gold broke ABOVE the trendline connecting the all time high of January 1980 and the last bull market high set in February 1996. In other words - GOLD BROKE ABOVE A TWENTY-TWO YEAR TRENDLINE! You can BET that the financial powers that be noticed that.
(The Gold Bull Market - June 7)
We can only repeat what we stated two weeks ago. Breaking through a TWENTY-TWO YEAR OLD TRENDLINE is a BIG deal. It is seldom/ever done without some friction. So far, it is remarkable how little friction there has been.
It is true that Gold's gains in $US terms have been "sluggish" this week given the accelerating slide of the U.S. Dollar. Here's one final perspective, comparing Gold's 2002 high set on June 4 with its level today.
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Again, if the action on spot future $US Gold had "mirrored" the action on the $US index since June 4, then Gold would be 2.21% ABOVE its June 4 level of $US 327.80. That would put Gold at $US 335.04. Yes, Gold has been "sluggish" since the beginning of this month. But its annual performance has been STELLAR. And never forget, Gold is the one investment vehicle that the global financial powers that be do NOT want to see rise. In light of this FACT, Gold's performance is even more STELLAR.