Saturday, May 1, 2010

Gold At New All Time Highs - Again

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On a weekly closing basis, Gold finished Friday at a new all-time nominal high (we missed a new closing monthly high by about 40 cents) when priced in U.S. Dollars. Get used to reading it, although one of the reasons I am posting it is because I didn't notice it elsewhere on the web. Here's a one year weekly linear plot to show the new all-time weekly closing high for Gold on a nominal basis:

Granted, the all-time daily closing high in nominal terms is still $50 away. For some of the other debt-backed paper currencies around the world, it was just another ho hum week of new all-time highs. Following are some 6 month daily charts of the Gold price denominated in various currencies around the world thru Friday's close courtesy of Let's start off with the the so-called "traditional safe haven" currency, the Swiss franc:

And here's the "super strong because of deflation" Japanese yen:

I actually like this Yen chart for a possible rhyme in the U.S. price of Gold. New all-time print highs to get everyone excited, then a brief blip below the all-time highs for maybe a few weeks to scare people into thinking it was a false breakout. I am sure Prechter could find a bearish wave count on Gold at that point that would suggest Gold is going to $500/oz or less. Next up, the currency everyone is talking about these days, the Euro:

And finally, the British Pound:

The Dow to Gold ratio looks to me like it is about to break down out of a head and shoulders-type top. Here's a 15 month daily candlestick chart thru Friday's close to show the action in this ratio:

A breakdown here means a test of the previous low of 7 in March of 2009 and almost certainly a subsequent prompt new secular low in this ratio below the 7 level. Here's the 6 month scoreboard for Gold's gains versus general stock market gains in the individual countries listed above. Please note that the returns ignore dividends, which is not fair to paperbugs:

The paper financial assets (i.e. general stocks as a proxy) peddled by our brilliant masters of the universe versus - a shiny piece of metal!? How can it be? Perhaps there's something to this barbarous relic after all...

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