On Monday, August 19, spot future Gold fell $US 7.70 to $US 306.00. Now, at the end of August, it has recovered nearly all of that fall. Spot future (October) Gold closed on Friday August 30 at $US 312.80, down $US 0.50 on the day and up $6.10 on the week. Over the month of August, spot future Gold managed a rise of $US 9.60 ($US 303.20 to $US 312.80) or 3.17%. That actually beats the Dow, which fell by 73 points or 0.84% over the month. Finally, the $US index fell 0.61 points or 0.57% during August.
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 August 23 at $US 332.20.
The figure above has been hovering around the $US 330 level - the top of Gold's recent trading range, for about two months now. You will note the HUGE discrepancy between $US weakness and $US Gold "strength" since Gold broke above $US 300 in late March. Even with that discrepancy, you will also note the HUGELY superior performance of Gold compared to the Dollar or the Dow since that date. Imagine the situation if Gold HAD mirrored U.S. Dollar (and stock market) weakness since March.
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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This week, Gold has jumped back above both its 10 and 20 day moving averages on the daily bar chart. the $US 7.70 Gold "hit" on August 19 has forced the 10-day average back below the 20-day one. We'll see how long that lasts. On the weekly bar chart, Gold is hovering just below its shorter-term (20 week) moving average. On the point and figure chart, Gold has rebounded back above the TOP of its post April 2001 upchannel for the second time. You can see how well the top of the channel is providing support. Please note that the uptrend lines on both the weekly bar chart and the point and figure chart are at or about the $US 295 level.
And finally, here's one final perspective, comparing Gold's 2002 high set on June 4 with its level today.
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Since Gold hit its 2002 high on June 4, it has fallen more in percentage terms than has the $US index over the same period. If the action on spot future $US Gold had "mirrored" the action on the $US index since June 4, then Gold would be 3.66% ABOVE its June 4 level of $US 327.80. That would put Gold at $US 339.80.
Again, this price is well over the vital $US 330 resistance level. It has been clear that while Gold IS providing a profitable "safe haven" for those who do not wish to be in either the U.S. stock market or the U.S. Dollar, its performance is lagging the weakness in both markets. If Gold had merely mirrored the performance of the U.S. Dollar since March, it would now be well above its universally agreed resistance point of $US 330
Spot future Gold last closed BELOW $US 300 on April 9. The correction from the 2002 high of June 4 ($US 327.80) is now almost three months old. We'll see how much longer it lasts.