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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (17992)	6/20/1999 10:00:00 PM
From: Zardoz	Read Replies (2) \| Respond to of 99985

there is however an interesting divergence between the XAU and the price of gold, with the latter collapsing to new lows and the former holding up relatively well. perhaps this is a sign that gold will soon turn around; Although gold may very well be set for a rise, it's possible that the XAU has held up well due to the majour XAU components which are hedgers producers. So Stocks such as PDG/ABX will still reap nearly the exact same profits at $280 or $250. With that said, only a larger yield on bonds which would hurt PE's would have an noticeable effect on the XAU. But, the same higher yields also make the Gold carry rates even more attractive, and could thus push gold lower. Since if the gold carry trade was good at 5%, it must be rocking good at 6%. Either way, the volatility of the XAU and gold has diminished considerably. PS: in saying the above, I'm long one of the XAU components stocks... not as much for an extreme rise in gold, but a TA bounce. And of the two mentioned, one is better for the upside. I speculate a 3 week rise, so I own 'short' term call options {purchased on friday, for July expiration}.