Is gold's gut check over?
By Peter Brimelow
CBS.MarketWatch.com
Tuesday, May 25, 2004
http://cbs.marketwatch.com/news/story.asp?guid=%7B49513082%2D504B% [1]
2D4FA7%2DAB7C%2D91F40D255838%7D&siteid=mktw
The gold geezers have remained grimly determined
through the metal's $50 break -- and now they're even
starting to grin. Slightly.
The gold geezers is my name for the six letter editors
who were around at the time of the great gold blowoff
in 1980 -- and the subsequent decline, which they
generally navigated quite well. I follow them on the
theory that experience counts.
When I last wrote about them they were all basically
bullish, except Elliott Wave Theorist's Robert Prechter.
Gold did spike higher, reaching a multi-year high of $430.
But then it broke.
Richard Russell of Dow Theory Letters summed up like
this on Friday:
"It appears that gold has gone through another 'gut
check,' which is a powerful reaction calculated to
separate all but the most dedicated from their positions."
The gold geezers did not flinch. In fact, they're slightly
more bullish now than they were then. Michael Burke of
Investors Intelligence has increased his gold mutual fund
exposure from 50 percent to 75 percent. (He favors
Fidelity Select Precious Metals Switch Fund.)
This has happened before. The geezers were notably
unshaken when gold broke in early 2003. As it turned
out, they were right.
On the other hand, the geezers remained very calm
when gold reached $400 last fall. And, of course, gold
did fall back.
They're in it for the long haul.
Nevertheless, in March some geezers were showing
short-term stress -- correctly. For example, both James
Dines of the Dines Letter and Harry Schultz of the
International Harry Schultz Letter were concerned about
bullion, and particularly shares.
Not any more. Dines headed his latest gold
pronouncement "OVERSOLD AND OVERDUE FOR A
RISE."
He wrote:
"There have been a number of these scary gold and silver
drops since the major bull market began in 2001, and the
current consolidation has been deep enough that it should
be ending somewhere around these levels. Such declines
are always discouraging, which is why it's difficult to buy
near bottoms, so please keep in mind Dinesism #42
(DITER) in which the very function of declines in a major
bull market is to keep investors out -- until the top. Also
see Dinesisms #28 (DITAKE) and #36 (DIMOTION)."
I don't know exactly what these acronyms mean (although
I'm pretty sure what the "D" stands for). But you get the
point.
Harry Shultz also writes that "the gold correction may be
ending." Both gold shares and bullion, he argues, "are at
mid-2003 support levels."
His currency charts, he says, "imply gold back up to $430,
by which time I hope the chart will indicate the next wave
target. But I'll take at least half profits at $430, as it
will be a triple-top, which usually means a hesitation in
price. Then I'll rebuy after a convincing break above $430.
If/When."
Shultz lists his "personal favorites, based on charts:
Wheaton River, Gammon Lake, and Yamana Resources.
Frankly, there aren't many!"
Dow Theory Letters' Russell also echoes this cautious
optimism. His technical work, he says, "makes me believe
that the gold correction has come to an end, and that the
direction of gold and gold shares will now be to higher
levels."
Monday night, he added: "Gold plodding higher. ... Gold
shares appear to have bottomed too. But it may take
more consolidation, backing-and-filling for gold and the
shares to assume a truly bullish profile."
----------------------------------------------------
To subscribe to GATA's dispatches, send an e-mail to:
gata-subscribe@yahoogroups.com [2]
To unsubscribe, send an e-mail to:
gata-unsubscribe@yahoogroups.com [3]
----------------------------------------------------
RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS
Free sites:
http://www.cbs.marketwatch.com [5]
http://www.gold-eagle.com/ [7]
http://www.capitalupdates.com/ [11]
http://www.DailyReckoning.com [12]
http://www.goldenbar.com/ [13]
http://www.silver-investor.com [14]
http://www.thebulliondesk.com/ [15]
http://www.sharelynx.com/ [16]
http://www.mininglife.com/ [17]
http://www.financialsense.com [18]
http://www.goldensextant.com [19]
http://www.goldismoney.info/index.html [20]
http://www.howestreet.com [21]
http://www.depression2.tv [22]
http://www.moneyfiles.org/ [23]
http://www.howestreet.com [21]
http://www.minersmanual.com/minernews.html [24]
http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html [25]
http://www.goldcolony.com [26]
http://www.miningstocks.com [27]
http://www.mineralstox.com [28]
http://www.SilverSeek.com [30]
http://www.investmentrarities.com [31]
http://www.kuik.com/KH/KH.html [32]
(Korelin Business Report -- audio)
http://www.plata.com.mx/plata/home.htm [33]
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm [34]
(In English)
Subscription site:
http://www.lemetropolecafe.com/ [35]
Eagle Ranch discussion site:
http://os2eagle.net/checksum.htm [37]
Ted Butler silver commentary archive:
http://www.investmentrarities.com/ [38]
----------------------------------------------------
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 [39]
Centennial Precious Metals
3033 East 1st Ave., Suite 403
Denver, Colorado 80206
www.USAGold.com [40]
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 [41]
Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
www.ColoradoGold.com [42]
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net [43]
El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
http://www.eldoradogold.net [44]
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net [45]
Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
http://www.gloomdoom.com [46]
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com [47]
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 [48]
Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
www.certifiedcoins.com [49]
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com [50]
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 [51]
Contacts: David Schectman,
Andy Schectman, and Bob Sichel
Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com [52]
314-965-9797
1-800-280-9797
http://www.mocoin.com [53]
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 [54]
Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com [55]
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com [56]
----------------------------------------------------
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 [57]
By GoldMoney:
http://www.GoldMoney.com [58]
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.