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True, it seems that every time the Dow rallies, the gold market takes a hit.
The missing piece here is, that the US Dollar has been taking on water.
No matter what the Dow does, the general perception is that Bush's
Presidency will
be negative for the strength of the dollar.
The following reasons for that:
1) his tax cut policy
2) his Treasury secretary is know for a weak dollar policy, there is a
belief that he will want a weaker dollar to
help lower the massive US Trade Deficit.
Since the US dollar is the fiat currency of choice for the world (for now
anyway), any weakening in the dollar should bring strength to gold. The
last two times gold has made a run at the trendline, it has been on violent
vertical moves. This time, it has been gradual, and gold prices seem to
have made a base. Looks like a good risk/reward trade to me at these
prices. Hope it holds.
Wouldn't be surprised if some gold related news broke this week to ignite
the gold fuse.
James
----- Original Message -----
From: "STUART AUSLANDER" <u.stuart-auslander@xxxxxxx>
To: <realtraders@xxxxxxxxxxx>
Sent: Monday, December 25, 2000 9:47 AM
Subject: Re: [RT] Big Move in Gold Prices Coming Soon
> My reading of the charts of gold stocks researching them back over 70
> years indicates that major changes in direction (at least a year) in
> this group of stocks is preceeded by heavy volume at bottoms. I don't
> see it here. Consequently I am skeptical that we would be having a
> major reversal to the up side. I have no strong opinion on the shorter
> term except to suggest that as the DOW keeps getting stronger the
> counter trend rally in gold will loose the followers that are trying to
> escape the DOW BEAR.
>
> James Taylor wrote:
>
> > For educational purposes only: Gold is testing a downtrend line
> > spanning over 1 1/2 years, and will likely break thru it, sending
> > prices sharply higher in the coming week. As prices have fallen in
> > gold over this period, the open interest has also decreased,
> > signifying that the market is strong and ready to turn around and
> > advance. Gold prices have risen from $270 to over $275 during the
> > last few weeks. Copper prices have risen and the stock prices of
> > gold producers have also risen, foretelling of gold's likely advance
> > here. Possible ways to take advantage of this move in gold:1) buy gold
> > futures2) buy the stock of gold mining companies: NEM (Newmont
> > Mining), ABX (Barrack Gold), HM (Homestake Mining)
> >
> >
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