 |
|
| All Clear for Gold? - Feb. 10, 2004 |
|
In mid December, with physical gold around $410, I opined that the metal
would make it into the $425 to $430 range before much of a pullback took
place. This objective was met, at which time I forecast a correction that was
likely to find strong support in the $400 to $410 range.
Last week, bullion briefly sold a little below $400 but has rebounded
nicely. As I write this, spot gold is trading around $408, and the active April
Comex contract is approximately $410. Thus, from the recent high to the
recent low, gold fell about 8%, and it has now recovered about one-third of the
decline.
The setback in the XAU was a good deal worse, which is not surprising.
>From its closing high of 112.88 on 1/5, the XAU dropped to a recent closing low
of 94.05, which was set on 1/29, and which made for a decline of 16.7%.
Yesterday's close of 101.94 marked about a 50% recapture of the loss.
So my overall impression of recent performance is, "so far, so good." I
aim this assessment primarily at the behavior of physical gold, since it looks
like it would like generally to hold $400, and to start building something of
a base from just under $400 to, say, roughly $10 above it. And the ability
to accomplish this mission in the period immediately ahead was abetted over the
weekend by the outcome of the G-7 meeting in Boca Raton. This was an outcome
you could adequately sum up quite tersely, to wit: with regard to the dollar,
no change.
|
|
|
|
|
|