In case you missed it last week, here are the seven best annual performances for Gold since President Nixon closed the "Gold Window" in August 1971. The 1971 performance is also shown for comparison purposes.
December 31 - Year-end 2002
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(Chart appears here in original analysis)
As you can see on this chart, January 2003 has started out as the SECOND month when Gold has finally broken loose from the downtrend which has confined it EVER SINCE IT HIT ITS ALL TIME HIGH (CLOSE) OF $US 850 IN JANUARY 1980. For any follower of Gold, that is a BIG deal. There are none bigger. Regardless of the manipulation of the $US Gold price, which has been a constant over many decades now, charts don't lie. Gold has broken above a PRIMARY downtrend of TWENTY-THREE years standing. In the process, it has established a PRIMARY UPTREND.
Speaking of "primary trends", here are two more. First, the Dow since the 1987 crash. Second, the US Dollar index since its 1995 bottom:
(Chart appears here in original analysis)
The Dow is in a PRIMARY downtrend. Can you see the trendline which is anchored in the Dow's post 1987 crash low (1738)? Note that the index crashed BELOW this trendline on its way down to its 2002 low of 7286 set on October 9. Since then, the Dow has regained this trendline and remains above it today. THE signal that the Dow's bear market is on in earnest will come when the index goes back below that post-1987 uptrend line and STAYS there.
(Chart appears here in original analysis)
Look at THIS chart. Remember the years of the "strong Dollar policy" which began in the mid 1990s? The $US bull market began in the mid 1990s, and remained intact until almost the end of 2002. Since the beginning of December, however, and as Gold was climbing from $US 330 to $US 355, the $US index finally broke BELOW its primary uptrend. That is the situation now. The $US index is in a PRIMARY downtrend, having broken below a trendline which has supported it for nearly EIGHT years.
The financial "powers that be" can "jawbone" as much as they like. The Fed can "pump" as much as it likes. Mr Bush can announce as many "stimulus packages" as he likes. The fact is that the "paper" markets - including the CURRENCY market, are in PRIMARY downtrends. Gold, as one would expect, is in a PRIMARY uptrend. That's all that any of us need to know.
The next time you feel a twinge of "worry" about the Gold price, take a good look at these three charts - you are welcome to save them. Follow them as they develop at this website. As long as these PRIMARY trends remain in force, you have nothing to worry about - IF YOU OWN GOLD.
If you've been away for a while, on holiday maybe, HAPPY NEW YEAR. It has certainly started off well. We hope these charts will help in showing you that 2003 is going to be a very happy year indeed - for GOLD.