Gold's May plunge: is the bull run over?

The price of gold has dropped about $80 or 12% in the past two weeks from its peak of $720 on May 12. It now hovers in the $645 range. What happened?

Although I was anticipating some volatility once transit Uranus separated from Jupiter in the gold futures chart (Dec 31 1974 10.00 am NYC), I was caught a little off guard by the severity of the decline. Here are some of the key factors involved in the recent short term price fluctuations.

1. Transit Uranus conjoined natal Jupiter on April 27. The time leading up to this conjunction corresponded with the sharpest gains in the gold price. I should note also that this chart is running a Venus-Jupiter dasha period, and therefore influences on Jupiter will tend to influence the short term outcomes disproportionately to other planets. Dasha lord Venus operates as longer term background influence.

2. Transit Jupiter in retrograde motion exactly trined natal Jupiter on May 6. This was another benefic influence on the price, and combined with the Uranus and Venus transits to Jupiter in April, created a wholly positive price environment for gold. Normally, I wouldn't pay too much attention to the Jupiter to Jupiter transits, but because it is the antardasha lord, we should recognize that Jupiter will exert a lot of influence here.

3. Transit Uranus is applying to a square to natal Mars throughout May and into June. The negative impact of this difficult energy began to be felt as soon as Uranus separated from Jupiter. Uranus' next stop was therefore the square with malefic Mars. This is not a good influence and is likely the a chief source of the negative sentiment in the gold market at present, at least from a purely transit perspective. Mars-Uranus in hard aspect will create volatile, unexpected, and unpleasant situations which in the context of commodity prices will likely push gold down. The image of a "train wreck" comes to mind.

Where will the market go from here? This is a difficult question given the strong and unpredictable Uranus influence in the next few months, along with some potentially negative Saturn influences in July and August. Here's my best guess at this point:

4. Prices are likely to remain weak at least until Uranus stations on June 19. I would not be surprised to see prices fall further, although I am not at all sure. Once Uranus reverse direction away from the Mars square and heads back towards Jupiter, we will probably see more price support. This bullish period will correspond to growing tension with Iran, since the Iran horoscope is heavily afflicted at this time. Investors looking for a short-term exit point may find this window to their liking.

5. The best time for price increase will be late June and the first part of July as Jupiter will station and go forward on July 6 (Happy Birthday, George). This corresponds to a fairly close sextile to natal Sun. I think we will see a significant price rise, perhaps 10-20% off the lows. (see chart above)

6. The effect of Saturn's transit to the natal Moon will not be favourable. Expect at least some decline at the end of July.

7. Much of the expected price rise associated with retrograde transit Uranus applying to natal Jupiter and transit Jupiter applying to natal Jupiter will be offset by transit Saturn's aspect to the ascendant during the late summer. Although the exact ascendant of this chart remains in doubt, Saturn's influence will be felt in August and September. That said, a price increase is still possible although it will not be comparable to what we saw in March and April. This will be a seesaw battle between the bulls and bears. The Saturn station in early December will occur in close aspect to the ascendant and will likely mark another significant decline in prices around that time.

8 The next major trend upward will take place in January 2007. Again, I can see this linked to critical geopolitical and military concerns. This can be seen through transit Uranus now direct applying to natal Jupiter while Rahu (north node) applies to Jupiter. This should have an explosive effect on prices that will likely last until at least April 2007. As I see it now, this is where the medium term gold price top occurs.

9. Since the Jupiter subperiod ends in June 2007 and is followed by Saturn, I can't see the bullish price trend lasting beyond that date.