Gold as a commodity or as a precious metal has rarely lost its charm, but there was a time when it was languishing at levels of around $255 to $290 for many years, and was considered an investment with mediocre returns. It faced stiff resistances at levels of $290-300, then at $400 and always kept testing this band and ceiling, and retracing, despite a perpetual shortage of supply from its primary source in Africa.
All this has reversed considerably when it broke this resistance level earlier in 2002, and prices have shot up more than double over a few years to about $625-$650 an oz.! This extraordinary shift commenced when gold broke its resistance at $300 dollars and has not reappeared at that price level again. The real truth is, the price floor over previous ten years was $300.65. It stayed really quietly among $300 and $400 for almost twelve months in-between, and was hovering about its 200 day moving average for quite a long time, irritating a good deal of traders by shifting on top of and beneath the moving average.
It finally showed some signs of life when it broke vital resistances and its 200-day moving averages at the same time, moving beyond the $400 level with higher volumes in 2004. It gathered momentum, and showed signs of a major price break-out in 2005. In December 2005, gold breached $500 level. Then it hit a tidal wave of selling due to profit taking by many traders and investors at that time. That allowed a price consolidation for the remaining of the year. In 2006, gold began a closely watched vertical rise with very larger volumes, with gold price hitting $700 and then hitting a high of $725.75 in the month of May, just prior to the global market liquidity crisis strike.
A long correction followed, which was inevitable after such a steep and swift rise, and gold retraced to 50% of it rise. This fall was steady, and prices moved down to $575 levels till October 2006. It is here that they stabilized and then continued its bull run to a point where gold now trades at $1500-$1650 levels in the past twelve months.
The world has witnessed quite a few global crisis during this same period, ranging from the U.S. war with Iraq, the nuclear issues with North Korea and Iran, the great global recession and the related Euro crisis. Surrounded with so much uncertainties, gold was pretty effectively acting its traditional role as a safe haven. In spite of all these events, gold is considerably moving higher for the past twelve months.
Gold bullion and gold coins now seems to be getting ready for another long-term secular bull market. Whichever way you see it, gold has a good run in the past ten years, and it is currently consolidating , ready for the next bull run to head for newer highs in the next few years.
All this has reversed considerably when it broke this resistance level earlier in 2002, and prices have shot up more than double over a few years to about $625-$650 an oz.! This extraordinary shift commenced when gold broke its resistance at $300 dollars and has not reappeared at that price level again. The real truth is, the price floor over previous ten years was $300.65. It stayed really quietly among $300 and $400 for almost twelve months in-between, and was hovering about its 200 day moving average for quite a long time, irritating a good deal of traders by shifting on top of and beneath the moving average.
It finally showed some signs of life when it broke vital resistances and its 200-day moving averages at the same time, moving beyond the $400 level with higher volumes in 2004. It gathered momentum, and showed signs of a major price break-out in 2005. In December 2005, gold breached $500 level. Then it hit a tidal wave of selling due to profit taking by many traders and investors at that time. That allowed a price consolidation for the remaining of the year. In 2006, gold began a closely watched vertical rise with very larger volumes, with gold price hitting $700 and then hitting a high of $725.75 in the month of May, just prior to the global market liquidity crisis strike.
A long correction followed, which was inevitable after such a steep and swift rise, and gold retraced to 50% of it rise. This fall was steady, and prices moved down to $575 levels till October 2006. It is here that they stabilized and then continued its bull run to a point where gold now trades at $1500-$1650 levels in the past twelve months.
The world has witnessed quite a few global crisis during this same period, ranging from the U.S. war with Iraq, the nuclear issues with North Korea and Iran, the great global recession and the related Euro crisis. Surrounded with so much uncertainties, gold was pretty effectively acting its traditional role as a safe haven. In spite of all these events, gold is considerably moving higher for the past twelve months.
Gold bullion and gold coins now seems to be getting ready for another long-term secular bull market. Whichever way you see it, gold has a good run in the past ten years, and it is currently consolidating , ready for the next bull run to head for newer highs in the next few years.
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