Take a look at the chart to the left - the daily bar chart (appears in original commentary). You can see that on November 6, the day that the Fed cut rates by 0.50%, Gold retreated back to just touch the shorter-term (10 day) moving average (MA) at its intraday low. Also this week, the shorter term (10 day) MA has moved back above the longer-term (20 day) one, signalling that Gold upturn is gaining strength.
For a month, the $US index hardly moved. It closed on September 26 at 108.15, and a month later, on October 25, it closed at 108.17. Over the past two weeks, the $US index lost 3.23% points to close at 104.68. The $US Index is now only 0.26 points above its 104.42 2002 low set on July 19.
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 November 8 at $US 338.40.
You can see here that the "projected" Gold price, if Gold had proportionally reacted to $US weakness since March 27, it would have broken away from the $US 330 level by now. $US 330 is, of course, the "glass ceiling" which has been in place on the $US Gold price ever since it hit its 2002 high ($US 327.80 spot future basis) on June 4.
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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We have already discussed the daily bar chart. On the weekly bar chart, Gold has once again regained the $US 320 level, for the fourth time since it hit its $US327.80 high more than five months ago in early June. On the point and figure chart, Gold is now right back to resistance having climbed straight up from the $US 310 level it hit just over two weeks ago. Note the line connecting the "downspikes" and that each has bottomed higher than the previous one.
And finally, here's one final perspective, comparing Gold's 2002 high closing level set on June 4 with its level today.
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Gold's loss since its June 4 2002 high has come close to halving over the past week and is now considerably lower in percentage terms than the loss on 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 5.83% ABOVE its June 4 level of $US 327.80. That would put Gold at $US 346.90.
As you can see, Gold is a long way below where it "should" be if the weakness in the $US since Gold hit its 2002 high back in June had been reflected in a stronger Gold price. That hasn't happened. What HAS happened is that a "coiled spring" has been put in place underneath the $US Gold price, making it much more likely that Gold will all of a sudden put on a major spurt to "catch up" with the falling Dollar. Such a spurt has been a feature of every previous Gold bull market. We haven't seen it in this one - yet.
The Fed has panicked and hauled US rates down by 0.50%, with the predictable effect on the US Dollar. US stock markets are still "hanging in there", but have weakened since the rate cut. And Gold continues to "strengthen" at a glacial rate.