Exciting, isn't it, fellow Gold watchers. This week, the Comex spot future Gold price is up the princely total of ten cents. The price went down on Monday and Tuesday and then went up on Wednesday and Thursday. Friday (today) is of course the start of the Easter weekend.
However, before you fall asleep, there are a couple of things to consider. First, take a look at the charts to the left. Note that on the daily bar chart, the price has popped above both moving averages for the first time in a month. You can also see that the weekly bar chart has what amounts to a triple bottoms on it. Now, cast your eyes down to the P&F chart. See how TIGHT the "V" is getting. There is nowhere to go on this chart but either above the zone - or below it. In sum, the charts on this page are telling us that the $US Gold price is not going to remain quiescent much longer. There simply isn't any room left for it to go "sidways" any further.
The other thing to consider is the fact that the $US index staged a recovery this week. By March 30, the $US index had surged to 117.63, less than a point below its multi-year high (118.45) of November 2000. Then, by April 6, the index had slumped to 114.90. This week, the $US Index managed to climb back to 116.22 on April 11, before falling over to end the week at 115.63. We are still waiting for the $US to start to give way in earnest, but it is clear that it is having greater and greater difficulty in sustaining its present lofty levels.
Further, Treasury yields have surged this week, on everthing but the extreme long end (30-year) and the extreme short end (3-month). The yield curve has straightened out, but the whole thing has also steepened. So far, most of this is money being hauled out of bonds and put back into stocks. But in "normal" times, one would have expected such a jump in bond yields to furnish a much better bang for the buck in stocks than has been the case so far.
In sum, there is a lot more going on that meets the eye when just considering the 10 cent "jump" in Gold prices this week. As a final indicator - take a look at the lease rate charts if you haven't already done so. You can clearly see that the "calm" of the first part of 2001 is over. It is getting harder and harder for the Central Banks to find enough Gold to lend. And with Gold miners all over the world "high grading", the supply of newly mined Gold has nowhere to go but down.
Is this the "calm before the storm". We think it is. At the very least, the longer this inactivity goes on, the clearer it becomes that there is next to NO downside risk on owning physical Gold.