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Gold/Mining/Energy : GOLD-XAU -- Ignore unavailable to you. Want to Upgrade?

To: IngotWeTrust who wrote (1129)	1/17/1998 1:29:00 PM
From: Eashoa' M'sheekha	Read Replies (1) \| Respond to of 1756

Gold stocks enjoy a mini rush By WILLIAM HANLEY The Financial Post It used to be said that an ounce of gold should buy a good suit. Well, don't show up at Harry Rosen brandishing $415 and demanding to see the Armanis. But gold's rise above US$290 (C$415) an ounce on Friday, with an intraday high of US$296, capped one of gold's better weeks since dressing-down Fridays came into fashion and gold doffed its image as a bespoke investment. Gold has a long way to go to get back even to where it was two years ago (at US$410), never mind the US$800 in 1979 that would have bought you two Armanis. But the week's action no doubt has the gold bugs dreaming of updating their threadbare wardrobes. The question now: is this flurry of optimism warranted or are the bugs just being measured up for yet another disappointment? The first part of the answer lies in why bullion advanced so rapidly this week from around US$278 on Monday. There are a number of reasons, beginning with the obvious one that it went up because it had been going down to oversold regions. This is known as a technical factor. Other points to consider include: The US$10 intraday spurt Friday was likely triggered by panicking short-sellers rushing to cover their positions and cut possible losses. To cover, shorts must buy gold, thereby driving up the price. Some traders noted that as the Chinese New Year approaches, Asians are buying gold jewelry to give as New Year gifts. (We are not so sure about this one, but we are willing to give the benefit of the doubt.) The Commodity Research Bureau index, which tracks a basket or hard and soft commodities and is often seen as a gauge of sentiment about inflation, rose strongly this week after declining steadily for weeks. This indicates to some observers that inflationary pressures could be reignited. Along the same line, the feeling this week was that the worst of the Asian crisis had passed and that deflation is not as much of a threat. Figures issued Friday on U.S. industrial production in December shows a solid economy seemingly unmoved by the events in Asia. Meantime, a mild selloff of the US$ against the Japanese yen as Asian markets advanced strongly also gave gold a boost. The appetite for gold spilled over into a burst of enthusiasm for the Toronto Stock Exchange's gold stocks, which rallied 14.7% on index in the week. And even the beaten-up base metals stocks, which could really use a healthy dose of inflation (or at least a good inflation scare), took heart from the gold "rushlet". The rush out of gold over the past few years has been largely sparked by central bank selling. But those who believe gold has bottomed say those sales are insignificant in relation to the vast amounts held by the nations, such as the U.S., that hold the biggest reserves. Another card up the gold bulls' sleeve is the argument, long presented by Quantum Research's Bob Hoye, that gold has fared well in times of deflation. Yes, the bugs have plenty of reasons that gold should be higher. And while general investor sentiment about gold might not have completely turned, further gains in the price could build a momentum play, the reverse of the play that has put the gold industry in a straitjacket. Indeed, it might go up because it's going up. But don't expect the gold bugs to be out shopping for new Armanis if gold rallies. They will do what they have always done: buy more gold. We don't particularly like gold as an "investment", preferring the more senior gold stocks. But we don't dismiss bullion and the junior explorers as a speculation.

To: IngotWeTrust who wrote (1129)	1/17/1998 2:15:00 PM
From: Tom Byron	Read Replies (1) \| Respond to of 1756

old 49r: Follow up to the Xau Cycle stuff. Might want to take a look at Y.Auger's 10 weeks cycle on his daily XAU chart (I prefer a 9 1/2 weeks cycle, but that's another story). It looks as though we need to finish off the 10 weeks before we start the jet engines. Could end up doing a "triple bottom" in the current 10 weeks cycle before it ends. End seems to be around the end of Jan or very early Fed. Notice 10 day Rate of Change chart at bottom. Hope this help in the ongoing f'ggering out of the direction of the XAU. Do feel that the low is in just need to get this 10'er out of the way. URL is mgl.ca