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To: ms.smartest.person who wrote (1324)	8/30/2006 6:11:37 PM
From: ms.smartest.person	of 3198

The Technical Speculator: Positive seasonality begins for gold sector in Sept. By Donald Dony, The Technical Speculator Wed, August 30, 2006 Gold has a normal trading cycle of about seven weeks and a strong season that typically begins in September or October and crests in December to January. This is a pattern that has remained stable year-after-year. As the last significant seven week cycle low in gold was on July 24th, the next bottom should arrive by mid-September. Gold can then be expected to climb back to seasonal highs by late 2006. Stronger seasonality strength in gold and gold shares are attributed to renewed Indian wedding jewellery demand, increased trader activity and updated geological survey results. Gold shares are expected to advance in the weeks prior to gold's move largely because they trade in anticipation of gold’s future direction. Technical evidence of building buying pressure is currently evident in the HUI (Chart 1). This un-hedged Gold Bugs Index now appears ready to break through the 355 resistance level by early September and run back up to 400 by late November. technicalspeculator.com However due to renewed short-term technical strength in the U.S. Dollar (Chart 2), gold’s initial move may be slightly hampered as a rising Dollar can reduce gold's attraction to investors. The long-term out look for the U.S. technicalspeculator.com Dollar still remains bearish as negative technicals and fundamentals once again dominate the currency’s trading direction. In addition, as the Fed is contemplating relaxing the current hawkish interest rate stance in light of recent weakening economic data, increased currency competition from rising global rates will begin to apply extra downward pressure in 2007. This all equates to a potentially favourable gold and gold shares market moving into the last quarter of 2006. More information is available in the August newsletter. Donald W. Dony FCSI, MFTA Your comments are always welcomed. Check out The Technical Speculator The Technical Speculator is an independent publication. The information included in this site is for information purposes only. money.canoe.ca

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