See those two little "dots" on the daily bar chart at the base of the present Gold surge. Those are at $US 316.80 where spot future Gold closed November trading for the Thanksgiving Holiday. Between the beginning of the year and the end of November, spot future Gold rose $US 37.80 from $US 279 to $US 316.80. In the MONTH of December (not yet over), spot future Gold has risen $US 32.40 from $US 316.80 to $US 349.20. What a terrific Christmas Present to us all.
With almost half of Gold's annual gain for 2002 having been made in the month of December, Gold is now battling with the $US 350 level. To see why, it is only necessary to have a look at the longer-term chart of the Gold bottom. As you can see, the top of the upchannel is just above the $US 350 level.
Since we won't be writing about a "Gold bottom" next year, take a minute to study this Gold Bottom chart (it will open in a new window). Note that the START of the bottom was the "Washington Agreement" spike of late 1999 and the end did not come until Gold had retreated back to its 1999 lows in Feb/April 2001. This is pretty standard for a long-running Gold bear market, especially one which has broken below a level ($US 300) which had supported Gold for nearly two decades.
Note further that ever since Gold began to climb from its April 2001 lows, there has never been any technical reason to sell it. Every high was higher, every low was higher. And once Gold finally and difinitively broke above $US 300 to stay in March this year, the longer-term (40 week) moving average has been challenged but never broken. Now, of course, the uptrend is firmly in place and Gold is challenging its TOP. A break ABOVE this upchannel would signal a further acceleration of the Gold price.
Here are the relative performances of $US Gold, the $US Index, and the Dow since Gold broke above $US 300 on March 27:
|
It is only over the past two weeks that Gold's percentage gain from late March has been bigger than the fall of the US Dollar index over the same period. So far, Gold has been merely "catching up" with the fall of the Dollar.
It was only two weeks ago that Gold finally breached the $US 330 glass ceiling which had been holding it back since June. Now that the six-month trading range has been difinitively broken, the Gold uptrend is as solid as a rock.
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:
|
As you can see, Gold has risen quite a bit more from its 2002 low than the $US index has fallen from its 2002 high. Any other result would have been grotesque, given the economiic and financial situation inside the US this year. And, since there is no prospect of any improvement in the situation next year, there is nothing to stop Gold accelerating even further, especially given the fact that the $US index is now well and truly broken its post 1995 uptrend line.
A Happy New Year to all. 2002 has certainly been one. We'll see you in 2003, when we will gleefully begin to follow the first full year of Gold's BULL MARKET. We expect to enjoy the ride thoroughly.