Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : A to Z Junior Mining Research Site -- Ignore unavailable to you. Want to Upgrade?

To: 4figureau who wrote (4264)	5/1/2003 9:34:58 AM
From: 4figureau	Read Replies (1) \| Respond to of 5423

Gold: "watching" and "working" Richard Russell Dow Theory Letters May 1, 2003 Gold -- Ah, there's nothing like a market that opens on news. Today's news -- The euro surged to a four-year high against the dollar. Gold, of course, has been "watching" the weak dollar intently. In recent sites, I've been drawing attention to the "head-and-shoulders" bottom that has been forming in gold. Over the last few days I've stated that gold is "working" on the right shoulder of this pattern. The upside breakout from the head-and-shoulders pattern, I said, would come if June gold could rally above 337.50. This morning, as the June Dollar Index broke to a new low, June gold rallied over four dollars to a high of 339.00, then backed of a bit but tended to hold in the 337-338 area. Subscribers must note how tentative, how reluctant, the gold shares are to react to any better action in gold, the metal. This is typical action during the early phase of a bull market. It's obvious that the public is not in the gold shares (do any of your friends own gold or gold stocks?), and thus gold shares are being bought by only the most enthusiastic element of the "gold-bug" fraternity. This has meant that buying of gold shares has been tentative, sporadic and erratic. With years of denigration and bad-mouthing by the central banks of the world, the public is hardly going to turn bullish on gold in a matter of a few weeks or months. It's going to take a long period of "good action" by gold before the public and most funds become "friendly" to gold and gold shares. But there's a "good" side to this suspicion and antipathy toward gold. The good side is that gold stocks remain on the bargain counter. Remember, gold mining companies enjoy huge leverage as the price of gold rises. Their expenses remain roughly the same while the price of their product, gold, rises. This is the single reason for holding gold shares as well as the basic product, gold. But again I want to warn subscribers that holding any item early in a bull market entails a test of nerves. A bull market wants to advance while taking the few possible number of investors with it. How does it do that? It does it by making it very damn difficult on your nerves to hold the right items. 321gold.com