Last week (Nov. 11-15), the $US recovered from 104.68 on the index to 105.19. This week (Nov. 18-22), the $US index recovered a bit more - from 105.19 to 106.28. In the process, the $US regained parity with the Euro. And Gold this week? It closed at $US 320.90 on November 15. It closed at $US 320.90 on November 22. Dead even in terms of $US, up slightly in terms of other currencies
Of course, all of spot future gold's weekly gains came in the last couple of hours trading on Friday, November 22, when a number of traders decided that they didn't want to carry their shorts through to the US Thanksgiving holiday next weekend.
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 22 at $US 334.30.
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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On the daily bar chart, you can see that Gold fell below both (10 and 20 day) moving averages this week before closing back above them on Friday's late bounce. On the weekly bar chart, Gold remains comfortably above both (10 and 20 week) moving averages with the uptrend perfectly intact. Please note that Gold's intraday lows for the past three weeks are almost identical. The point and figure chart has not moved from its position last week. It will turn up again on a spot future close of $US 321 or higher, $0.10 above Gold's Friday close.
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 is 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 4.39% ABOVE its June 4 level of $US 327.80. That would put Gold at $US 342.20.
The great "fear" on Wall Street in recent weeks has been "deflation". That has been assuaged, somewhat, by the Fed's rate cut of November 6, and the renewed "recovery" of US markets this week with the Dow gaining 371 points on Nov. 20-21. Gold, of course, is only positively influenced by "inflation", and everyone is sure that there isn't any of that.
The Producer Price Index (PPI) came in at 1.1%. It was ignored. Treasury bond yields spiked dramatically while the stock market was rallying on Nov. 20-21. That was ignored too. The Consumer Price Index (CPI) came in at 0.2%. It was blandly accepted. So, Gold is unchanged this week and the US Dollar is up slightly, despite the rate cut. We will see how long that lasts. We don't think it will last long.