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Strategies & Market Trends : Precious Metals mutual funds (gold, silver, PGMs)
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To: Wade who wrote (942)9/19/2005 11:31:49 PM
From: Larry S.  Read Replies (1) of 972
 
Dan Wade et al,

I will post the GMI data tonight while I'm at my computer so I don't miss another week or two or three.

The Commodities Corner in Barron's this week was all about the gold/oil ratio and how it is at an all-time low. But the story was not very bullish for gold. That suggests to me that gold will continue to move higher.

After posting the prior three weeks data a few days ago I looked a little more closely at the movement in lease rates and thought more about what they are telling us. I suggest that their exceedingly low value means that leased gold isn't being used to hold the market down. This suggests to me that the BBs are no longer trying to hold the price down and recognize that the price will rise. This is very bullish, me thinks. The present move may stopped for a while if the FED raises the rate again tomorrow more than a 1/4 point but that seems very unlikely even though Epstein, in his Economic Beat Column this week, argued that a 1/2 point rise would be required to calm the markets. He didn't say it but it is clear that one of his concerns is the continued rise in the price of gold.

The GMI/POG ratio:

On 9/15, the Barron's GMI was 719.55 up from the previous week's 695.18. With the POG also up at 457.20 (9/16), the ratio was up slightly at 1.57.

The ratio has reached the high side of the middle range but it doesn't yet suggest strongly a rise or drop in the POG or stocks. It may be indicating that interest in mining stocks is beginning to increase significantly.

The ratio a year ago was 1.51, almost as high as today.

Larry
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