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Strategies & Market Trends : Precious Metals mutual funds (gold, silver, PGMs) -- Ignore unavailable to you. Want to Upgrade?

To: Dan P who wrote (458)	2/20/2000 6:46:00 PM
From: Larry S.	Respond to of 972

Dan, Thank you for your comments. I agree that the action this week was positive. But, I expect more volatility in the market. As I have said before, I can't believe that the gold carry trade was not misused by bullion banks and others and that, as a result, a massive short position, which has yet to be unwound, exists. I believe that it will take a long time for these shorts to be unwound and, until they are, we should not expect the market indicators to respond under what one might call normal times, whatever they are. Until the shorts have been unwound, those holding the short positions will do all they can to keep the price of rising and I don't see how we can expect the market to respond normally to market forces. WRT the market in the early 70's, I remember some aspects of it all to well. But, I don't recall conditions equivalent to conditions today and I wasn't paying attention to the gold market in those days. And, I haven't found a site that gives me chart of the POG during those years. However, it is reasonable to me that gold stocks would do relatively well, assuming the POG was relatively firm, in an environment where the market was falling slowly. It also makes sense, as Bishop said repeatedly during 96 and 97, that gold stocks don't do well in a falling market if they are also over bought. They clearly are not over bought today. Therefore, my bottom line is that conditions are such today that we should expect PM stocks to do relatively well if the market were to fall significantly from here; though I don't expect a substantial drop in the market. Last, I can't help but call your attention to how poorly the GMI/POG ratio has predicted the market for gold stocks during the past year or so that I have been posting it. Its history doesn't appear to be repeating; though it may still be a useful indicator in the future. In looking over what I just wrote, I realize I have been rambling as well. Sorry, I've never claimed any relative expertise and don't today. Cheers, Larry

To: Dan P who wrote (458)	2/26/2000 9:48:00 PM
From: Larry S.	Read Replies (1) \| Respond to of 972

Dan, et al, I noticed in Barron's this week that Precious metal funds dropped to last place this past week while techs regained the top spot. It may also be interesting that Palladium is mentioned in the "Commodities Corner" in Barron's this week, and the last sentence states "Traders said Tocom's move could quash speculation in palladium futures, at least for the short term, though it won't change the bullish supply-and-demand equation." Now, the update of the GMI/POG ratio: On 2/24, the Barron's GMI was 323.28, down from the previous week's 346.41. With the POG down to 294.00(2/25), the ratio was 1.10, down from the previous week's 1.14. A year ago the ratio was 1.055. While history suggests that this low ratio is a strongly bullish indication for the next year, as you can see the indicator has had a very good record during the past year or so. Cheers, Larry