You are here
Iamgold shareholders reject Wheaton River merger; other bids are pending
By Mark Hulbert
CBSMarketWatch.com
Tuesday, July 6, 2004
http://cbs.marketwatch.com/news/story.asp?guid=%7B44E5F348%2D191B%
2D4DC4%2D8B55%2D8DEF3FF80B0D%7D&siteid=mktw
Gold was out of the limelight last week.
That's because the stock and bond markets occupied
center stage, as investors focused on what would
happen to those asset classes in the wake of the
Federal Reserve's interest-rate hike.
Now that the dust has settled from the Fed's decision,
perhaps gold will make it back onto investors' radar
screens.
It wasn't as though gold didn't try to capture investors'
attention last week. On June 29, the day before the
Fed's move, gold bullion dropped by some $10 per
ounce -- more than enough, if last week had been a
normal week, to get investors to sit up and take
notice.
But, to state the obvious, last week was not a normal
week.
In the expectation that this coming week will be one
in which investors do sit up and take notice, I'm
devoting this column to a contrarian assessment of
sentiment among gold-timing newsletters.
Not to bury my lead too much: Gold market sentiment
has deteriorated in recent weeks. Contrarians would
be much more confident that gold is in a bull market
if gold timers were more skeptical than they currently
are.
I base this assessment on the latest readings from the
Hulbert Gold Newsletter Sentiment Index (HGNSI),
which reflects the average recommended portfolio
exposure to the gold market among a subset of
gold-timing newsletters. As of last Friday's close, the
HGNSI stood at 46.2 percent.
To be sure, while this 46.2 percent reading is higher
than where the HGSNSI has been on almost all other
days over the past seven months, it still is lower than
the HGNSI's all-time high reading of near 90 percent.
But the source of concern is not the HGNSI's
absolute level but how it has reacted during recent
market corrections. For example, the HGNSI didn't
budge last week, despite gold's break. Nor did it move
down in early June, when gold suffered a similar break.
This represents a big change in the underlying mood
of many gold timers, and is not an encouraging sign.
It suggests that at least a core group of bullish gold
timers have dug in their heels. And, as contrarians
constantly remind us, stubborn bullishness is more a
sign of a market top than a market bottom.
Contrast what happened last week and in early June
with how gold-timing newsletters reacted in April and
the first half of May, when bullion dropped by more than
$50 per ounce. Then the HGNSI dropped nearly 40
percentage points -- from 46.9 percent to 7.7 percent.
That suggested that gold timers were relatively quick
to throw in the towel on their gold investments.
Or consider what happened late last year. Between
early December and early January, while gold bullion
was RISING by some $20 per ounce, the HGNSI was
DROPPING by some 40 percentage points. That's the
sort of action that makes a contrarian turn into a
passionate bull.
Unfortunately, the HGNSI's recent behavior is markedly
different from those two earlier instances.
Let me hasten to add that, even if this analysis turns
out to be correct, it doesn't mean that gold must enter
into a primary bear market. The market weakness that
is foreshadowed by the sentiment data might turn out
to be relatively short-term, after all.
It will be key to see how advisers react in the wake of
coming weakness. If the stubborn bulls relent and
throw in the towel, that would be an encouraging sign.
But if they continue to remain bullish come what may,
and especially if more timers become stubbornly
bullish with them, then a more significant decline in
the gold market becomes increasingly likely.
----------------------------------------------------
To subscribe to GATA's dispatches, send an e-mail to:
gata-subscribe@yahoogroups.com
To unsubscribe, send an e-mail to:
gata-unsubscribe@yahoogroups.com
----------------------------------------------------
RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS
Free sites:
http://www.cbs.marketwatch.com
http://www.capitalupdates.com/
http://www.silver-investor.com
http://www.thebulliondesk.com/
http://www.goldismoney.info/index.html
http://www.minersmanual.com/minernews.html
http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
http://www.investmentrarities.com
http://www.kuik.com/KH/KH.html
(Korelin Business Report -- audio)
http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)
Subscription site:
http://www.lemetropolecafe.com/
Eagle Ranch discussion site:
http://os2eagle.net/checksum.htm
Ted Butler silver commentary archive:
http://www.investmentrarities.com/
----------------------------------------------------
COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS
Blanchard & Co. Inc.
909 Poydras St., Suite 1900
New Orleans, Louisiana 70112
888-413-4653
http://www.blanchardonline.com
Centennial Precious Metals
3033 East 1st Ave., Suite 403
Denver, Colorado 80206
www.USAGold.com
Michael Kosares, Proprietor
US (800) 869-5115
Canada 1-800-294-9462
European Union 00-800-2760-2760
Australia 0011-800-2760-2760
cpm@usagold.com
Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
www.ColoradoGold.com
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net
El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
http://www.eldoradogold.net
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net
Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
http://www.gloomdoom.com
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com
Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
http://www.kitco.com
Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
www.certifiedcoins.com
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com
Miles Franklin Ltd.
3015 Ottawa Ave. South
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
fax: 952-925-0143
http://www.milesfranklin.com
Contacts: David Schectman,
Andy Schectman, and Bob Sichel
Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
314-965-9797
1-800-280-9797
http://www.mocoin.com
Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com
Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com
----------------------------------------------------
HOW TO HELP GATA
If you benefit from GATA's dispatches, please
consider making a financial contribution to
GATA. We welcome contributions as follows.
By check:
Gold Anti-Trust Action Committee Inc.
c/o Chris Powell, Secretary/Treasurer
7 Villa Louisa Road
Manchester, CT 06043-7541
USA
By credit card (MasterCard, Visa, and
Discover) over the Internet:
http://www.gata.org/creditcard.html
By GoldMoney:
http://www.GoldMoney.com
Gold Anti-Trust Action Committee Inc.
Holding number 50-08-58-L
Donors of $750 or more will, upon request,
be sent a print of Alain Despert's colorful
painting symbolizing our cause, titled "GATA."
GATA is a civil rights and educational
organization under the U.S. Internal Revenue
Code and contributions to it are tax-deductible
in the United States.
