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To: ild who wrote (177117)	7/3/2002 10:52:04 AM
From: ild	Read Replies (3) \| Respond to of 436258

From Heinz' PM: ... yes, i think RSA gold earnings will be stellar. i'm buying the stocks at these levels. i still hold a bunch of puts, yes. i really made hay with puts recently, and i think we have further down to go. of course there will be bounces, especially look for SnP 925 or thereabouts - a short term low is likely at that level. ... the PoG anticipated the weakening dollar, and partly went down now in anticipation of a bounce in the dollar. however, the dollar/gold relationship has become more complex these days: the strongest currency support for the PoG stems from a combination of strong euro, weak dollar, and weak yen. the recently strong yen has been a negative. however, the gold market has also had too many stale speculator longs that needed shaking out...also, July is the seasonally weakest month for physical gold demand, and the PoG anticipated this. however, both sentiment and technicals are telling me that the correction is probably very close to ending: we have several bullish divergences at the recent lows (HUI/XAU, HUI/PoG, PoG/PoS, etc. - also some of my proprietary oscillators are saying we're close). gold mutual funds, after having had paltry net inflows year-to-date, have suffered big outflows, short interest in XAU component stocks is at a record high, and anecdotally, the bears are tap dancing and chest thumping everywhere. gold investment newsletter writers are almost uniformly bearish, and gold mufus hold cash positions in excess of 30%. my take on this is: maximum downside risk in the PoG: 295-300. more likely though 310 will hold. max downside risk in the HUI: 115. more likely though the low is ALREADY IN. and once the corrective phase is done, it's off to the races once again. this bull market is far from over, regardless of whether it is only a cyclical or indeed a secular bull.