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 hasn't 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 people booked profits, and this allowed the price to steady for a month or so. 2006 saw a near vertical rise for gold on very high volumes, with gold hitting $700 and then making a high of $725.75 in May 2006, just before the liquidity crisis hit world markets.
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 have come to a point where gold now trades at $625-$650 levels.
Investors faced many global issues during this time, as the U.S. was dealing with the Iraq issue, Israel invaded Lebanon, North Koreans fired rockets as well as a nuclear bomb, and with a nuclear confrontation with Iran. With uncertain events like these, gold did quite well and served its role as a safe haven. Despite all this, on a year to year basis, Gold is still higher by 23%.
Gold bullion now appears to be in the very early stages of a long-term secular bull market. Any way you look at it, gold has been on the move for the last five years, and seem to be headed for newer highs in the years to come.