Gold: Uncharted Territory

Richard Russell
Dow Theory Letters
Nov 27, 2007

Extracted from the Nov 26, 2007 edition of Richard's Remarks

November 26, 2007 -- The gold price in Australian dollars has hit an all-time high, closing the week at more than $940 per ounce, after the price in US dollars rose on Friday night and the Aussie dollar eased.

Russell Comment -- Gold is now outperforming all fiat currencies. Or let me put it the correct way, all fiat currencies are losing value against gold. This is also true of most stocks and the Dow. As of Friday, one share of the Dow would buy only 15.74 ounces of gold. The Dow, in terms of gold, has been in a bear market since July 1999, at which time one share of the Dow would buy 44 ounces of gold.

Gold -- The nonsense and misinformation about gold never ends. We hear a lot about the "great 1980 rise in gold to a record price of 850" Actually, what happened is this. Gold closed above 800 in 1980 on only TWO DAYS. Gold closed on January 18, 1980 at a price of 830.00. Gold closed on January 21, 1980 at price of 850. The next day gold closed at 737.50. Gold in 1980 never closed above 800 again! The price of gold at the end of January 1980 was $659.

Gold has never in all history ended a month at 800 of above. This Friday will mark the end of the month of November. If Friday's gold is at 800 or above, it will be the FIRST TIME GOLD HAS EVER CLOSED A MONTH IN THE 800s!

Furthermore, in 1980 gold was in a parabolic rise. It was literally blowing its top when it surged to its peak at 850. Not so today. Gold has been rising methodically and rather carefully here in 2007. The big third phase speculative rise lies ahead.

I thought Friday's rise in gold of 26 dollars showed some urgency. We haven't seen a 26 dollar rise in gold in quite a while. Interestingly, that 26 dollar rise drew little attention from the media. Nobody appeared to have noticed it. Furthermore, nobody seems to realize that gold is now closing day after day over 800. SOMETHING IT HAS NEVER DONE BEFORE. Let me put it this way, dear subscribers -- the gold action is becoming more interesting as the weeks and months go by.

The chart below traces gold back to the 1980s, but this chart connects only the highest day of each month. Gold is now rising into uncharted territory.

lots more follows for subscribers...

Nov 26, 2007
Richard Russell
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