Gold: Secret Pressure
Richard Russell
Dow Theory Letters
April 1, 2003
Extracted from the 31 March 2003 issue of Richard Russell's Dow Theory Remarks
Gold -- Gold gapped up today, but I continue to get the feeling that large interests are putting pressure on gold to halt any advance. This "secret pressure" has frightened buyers in gold and gold stocks -- you can sense this fear in the very tentative and fragile rise in the gold shares. As I write this morning, with gold up 4.50 Newmont, the gold leader, is actually down. It's as though the gold stocks distrust any rise in the metal.
All of which provided investors with an excellent opportunity to buy the gold shares at what will some day be seen as bargain prices.
Ultimately, manipulation will fail in the face of the primary bull trend in gold. When it does fail, gold will act like a coiled spring that has been released. Until then, gold holders will have to be patient. As a matter of fact, what's the hurry? Personally, I'm not in a hurry to see the destruction of the dollar. Which is what a second and third phase of the gold bull market will be discounting.
So my advice to "gold-bugs" is to be very patient. The US is heading into a period of unbelievably high deficits. The tell-tale signal of this administration's fiscal insanity would be a surging price for gold. To me it's obvious that large interests don't want gold to go anywhere.
Thus, it seems to me that gold and gold stocks will back-and-fill until the dam breaks. The current wall has been erected by the anti-gold element, better known as the central banks.
But as sure as gold is real money, the dam that has been constructed against a higher gold price will crack. When that happens, gold will rise higher than anyone believes possible. Gold will be like the Dow when it was priced at 161 back in 1949.
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