russell exerpt: metal vs. paper
Next, I want to say a few words about gold. I just ran a ratio chart of gold against the Dollar Index (not the dollar but the Dollar Index). Thus I'm comparing the action of gold against the international value of the dollar.
The chart shows that beginning back in March 1995 the Dollar Index had been outperforming gold. But then on January 28 of 2002 the trend changed. Since January 28 of this year gold has been outperforming the Dollar Index.
On February 1, 2002, this gold/Dollar Index ratio broke out above its 50-day moving average. As I write today the ratio is well above its 50-day moving average.
Back on January 28 when the turn started, the gold/Dollar Index stood at 231.8. At the close today, the ratio stood at 269.5, very near the high for the year. The higher this ratio climbs, the more attractive gold will become internationally.
If this trend continues, it will mean that gold is continuing to outperform the Dollar Index -- which in turn means that from the standpoint of foreign investors, gold is a better place to be than the dollar. And that's a very important consideration, believe me it is.
Next, I ran a ratio chart of gold against the euro. Gold is outperforming the euro.
I ran a ratio chart of gold against the yen. Gold is outperforming the yen.
Gold, the only real intrinsic money, is now outperforming all paper. Where do you go for safety and to preserve your purchasing power? The market's supplying the answer -- gold.
Again, I caution subscribers that large interest do NOT want gold to rise -- they want gold lower, and they will do everything in their power to push gold down. The battle is on, and it's a fierce one. |
