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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If Gold's gain had exactly mirrored the loss on the $US index since March 27, Gold would have closed on July 12 at $US 334.66.
Look at the percentage losses on the Dollar and on the Dow (the losses on the other major U.S. market indices are even worse) since Gold cracked $US 300. You can see what an effort it has been to hold Gold's gain to the extent it has been held. As Dollar-denominated paper investments continue to fall, and as more and more investors shun the markets for these investments, the pressure under the $US Gold price will grow inexorably.
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 still further above its 2002 low in percentage terms than the $US index is below its 2002 high.
It has now been almost six weeks since spot future Gold hit its 2002 high - $US 327.80 on June 4 (see the table below). Gold finally lost touch with the $US 320 level on June 28 when it fell $US 5.70 to $US 313.90. Since then, the spot future close reached $US 311.30 on the July 3 - then took two trading days off for Independence day. And this week, Gold has gradually but steadily gone up (despite the $US 1.70 fall on Friday, July 12). This is Gold's first "up" week in $US terms since the week ending on June 21.
On the charts, the thing that is still worrying a lot of technicians is the possibility of a "head and shoulders" - best seen on the weekly bar chart - the move back down towards $US 310 and the sideways action of the past two weeks being the "right shoulder".
Possible? Yes, with Gold, anything is possible. But take a look at the longer-term weekly bar chart to put things in better perspective. Gold is still above both its (20 and 40 week) moving averages. There are THREE uptrend lines on this chart and Gold has fallen below only the steepest of them.
And finally, here's one final perspective, comparing Gold's 2002 high set on June 4 with its level today.
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The "perversion" continues. Last week, Gold's percentage fall in this table was GREATER than the percentage fall of the $US index since June 4. Now it it less. But Gold is still DOWN against the $US, not up. If the action on spot future $US Gold had "mirrored" the action on the $US index since June 4, then Gold would be 4.44% ABOVE its June 4 level of $US 327.80. That would put Gold at $US 342.35.
Gold is NOT mirroring the fall in the U.S. Dollar. Nor is it mirroring the agonising falls on U.S. stock markets. U.S. and world investors have learned not to trust either government or corporate accounting practices. But they have not yet learned not to trust the fiancial and monetary structure which underpins it all. They will. When they do, watch Gold's smoke.