what will it take - go up!, page-84

Last night gold shot up US$21.80 to US$978.00/oz. Several months ago twenty dollar moves were frequent, but as Wall Street has rallied gold has become stuck in a tight range around US$950, with a five dollar movement being a big day. With Wall Street now looking at least temporarily shaky, and the US dollar not responding as it should, there was a sudden rush into gold.

History notes that the worst month for the US stock market on average is September (not October as many might have assumed). History also notes that September is the on average the best month for gold. Historically, the period between May and August is a tough one for gold, given it is the quiet period between Asian holiday seasons, such as the bi-annual Indian wedding seasons. These kick off again toward the end of each year, and beforehand jewellery makers begin ordering in their gold so they can start fashioning trinkets ahead of the jump in demand.

Unlike past years, gold has not fallen heavily in the May-August gap in 2009 as many had assumed it might. Talk of US$750/oz was not uncommon. The reason can be assumed to be the ongoing concern over US debt, which has gold bugs screaming US$1200/oz once more, but nor has the US dollar collapsed - so far - as many expected. Thus gold has been stuck in limbo around the US$950 mark. Last night's surge would have woken up a few dozing gold traders however, and given the traditional fourth quarter rise in the gold price (if that is what is to occur) is based off US$950, and not US$750, then one assumes a breach of US$1000/oz is on the cards once more.