Gold as a commodity or as a precious metal has rarely lost its charm, but there was a time when 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 and always kept testing this band, and retracing, despite a perpetual shortage of supply from its primary source in Africa.
All this has changed dramatically when it broke this resistance in early 2002, and prices have shot up by an astounding 250% in the last five years to around $625-$650 an ounce! This dramatic move started when gold broke its resistance at $300 dollars and hasnt looked back since. In fact, the low over the last five years was $300.65. It stayed very quietly between $300 and $400 for a year in-between, and was hovering around its 200 day moving average for a long time, frustrating many traders by moving above and below it.
It showed strength when it broke key resistances as well as its 200-day moving average on higher volumes in July 2004 to move past $400. It gained momentum, and began to show break-out signals sometime in October 2005. Prices hit $500 in December, where a lot of...
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