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Gold is cheaper than ever relative to oil, Resource Investor reports
By Peter Brimelow
CBSMarketWatch.com
Monday, June 27, 2005
http://www.Marketwatch.com/news/story.asp?
column=Peter+Brimelow&siteid=mktw&dist=
NEW YORK -- Gold grinds on -- but a new gold vehicle has the
newsletters quarrelling.
Bullion finished last week above $440, after exceptional volume,
reflecting an extraordinary clash between buyers and sellers.
The Hulbert Gold Newsletter Sentiment Index (HGNSI), which
represents the average exposure to the gold market among a subset of
short-term gold timing, remained at 43% on Friday night, as it had
been the previous week.
This represents a sharp swing from negative 30% in April, although
bullion itself is less than $20 higher. Mark Hulbert says that, on a
contrary opinion basis, this is "at best neutral."
But sentiment as measured by HGNSI is far from excessive: the
HGNSI's range is from 90% to negative 31%.
Writing from their charting perspective, the Aden sisters said
recently in their Aden Forecast that gold is "now looking good from
a European and Japanese perspective, and it's building a solid
base. ... Gold would be very strong above $447 and a new high would
occur above $457."
And from a more fundamentalist perspective, Sy Harding reached a
similar conclusion in his Street Smart Report:
"The gold sector has been rallying in spite of the continuing rally
in the U.S. dollar. That is unusual. For a number of years gold has
been moving opposite to the dollar so consistently that we have used
the overbought/oversold condition of the dollar, and its likely
direction, as one of our tools in timing gold.
"This situation of having gold rally in spite of the continuing
strength in the dollar has us watching. It indicates that either the
dollar rally is likely to end very soon (which would be a big
positive for gold) or that inflation and currency uncertainties are
due to worsen gold is traditionally seen as a safe haven in times of
significantly rising inflation or turmoil in currency markets). Or
it could mean the gold rally is not sustainable.
"So we want to see gold break out above $445 and establish a higher
high for the year."
I'm quoting the Aden Forecast and Street Smart Report because they
are among the very respectable total of seven letters, among those
followed by the Hulbert Financial Digest, that are currently
recommending the exchange-traded fund StreetTRACKS Gold Shares (GLD).
(The others are: Global Investing; Outstanding Investments; Martin
Weiss' Safe Money Report; Investor's Intelligence ETF Review; Real
Wealth Report.)
I don't see a lot of discussion of Gold Shares in these letters. For
example, the latest issue of Outstanding Investments just lists it
as "Buy/defensive holding."
Gold Shares seems just to be taken at face value as a proxy for
bullion.
But, in what seems to be a technological/methodological/generational
shift within the gold bug world, another newer group of gold-
oriented services are bitterly critical of Gold Shares. They include
Reg Howe's goldensextant.com, Bill Murphy's lecafemetrople.com (full
disclosure: my brother John Brimelow is published there), and James
Turk's Freemarket Gold & Money Report.
As Turk put it recently:
"My point has been that GLD is not an alternative to owning physical
metal. Rather, it is just another paper alternative promising to
deliver gold. ...The asset reported on GLD's balance sheet
says: 'Investment in Gold.' It does not say just: 'Gold.' By
declaring GLD's asset to be an 'investment,' it is an easier hurdle
to meet for auditing purposes. Investments in gold can be nearly
anything gold related, and for example, include gold certificates
and other promises to pay gold. ... So do not view GLD as an
alternative to physical gold, because it's not."
Strangely, I don't see any discussion of this point in the more
traditional gold letters -- yet.
But if gold goes on, watch this space.
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RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS
Free sites:
http://www.cbs.marketwatch.com
http://www.usagold.com/amk/usagoldmarketupdate.html
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.kereport.com
(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)
http://www.resourceinvestor.com
http://www.goldpennystocks.com/
Subscription sites:
http://www.lemetropolecafe.com/
http://www.interventionalanalysis.com
http://www.investmentindicators.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
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Centennial Precious Metals
3033 East First Ave., Suite 807
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1-800-869-5115
http://www.USAGOLD.com
Michael Kosares, Proprietor
cpm@usagold.com
Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
http://www.ColoradoGold.com
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net
El Dorado Discount Gold
Box 11296
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http://www.eldoradogold.net
Harvey Gordin, President
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Gold & Silver Investments Ltd.
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+353 1 2315260/6
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http://www.goldinvestments.org
info@gold.ie
Investment Rarities Inc.
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Greg Westgaard, Sales Manager
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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
http://www.certifiedcoins.com
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com
Lone Star Silver Exchange
1702 S. Highway 121
Suite 607-111
Lewisville, Texas 75067
214-632-8869
http://www.discountsilverclub.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
The Moneychanger
Box 178
Westpoint, Tennessee 38486
http://www.the-moneychanger.com
Franklin Sanders
1-888-218-9226, 931-766-6066
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