GDR Update August 02, 2005

Gold Friendly Season Ahead of us ?

by Eric Hommelberg,
August 02, 2005

- summer doldrums and the gold shares
- GDR web site, what's new ?
- Introduction founding members golddrivers.com

Summer doldrums and the gold shares :

The summer doldrums are often characterized by its boring trading patterns but when we take a closer look at the junior shares we see some encouraging developments. Believe it or not, some of them approached a gain of nearly 100% since their nadir in May. I want to share some comments here which I’ve send to Bill Murphy of LeMetropolecafe today :

Hi Bill,

On June 16 I send you a note in where I said : “Can’t help but to think the bottom is in for the junior gold shares”. Well, despite the summer doldrums which many investors consider to be more boring as watching growing grass many juniors performed extremely well since their nadir end of May (eg Tanrange +76%, Seabridge Gold +89%, Mesina Minerals +115%, Virginia Gold Mines +76%, etc…the year to date best performers can be seen here)

Now the gold shares (HUI) seem to be a bit directionless but they have to choose direction soon.(HUI locked between its 50 and 200 dma). If the August/September period could live up to its own historical performance then we could be witnessing a break-out of the gold shares soon since gold clocked impressive gains over the past 4 years during this period (2001 +11%, 2002 +10%, 2003 +13%, 2004 +8%, 2005 ??):

Sure, no guarantees here that history will repeat itself again but my guess is it will. Why ? Gold could benefit imo from a rising Euro (declining Dollar). The Euro simply doesn’t want to go down below 120 it seems. It broke important down-trend lines to the upside and seems to have a free ride to the 126 area now, see chart below :

• The steep down-trend of May-June (DT-3) ended early July because of strong support at 120.
   
• The DT-2 down-trend line and the 50 dma are broken to the upside now.
   
• Next resistance near 126 (38% FIB retracement of the 136-120 down-move)

Now what if this scenario plays out this way ? Sure it bodes well for the gold shares which are outperforming gold anyhow since mid-May (declining Gold/HUI ratio). It even bodes better for the junior shares which in turn are outperforming their senior brothers since mid-May (see examples shown above). END.

See also additional comments/charts at :

http://www.golddrivers.com/chartpages/goldhuicharts.htm
 

GDR Web site, what’s new ?

- Editorial portal
- Best performers
- Founding members

Editorial portal :

An editorial section has been added to the home-page. This section contains links to the latest editorials on major gold sites such as goldseek, kitco, gold-eagle etc… This section will be updated twice a day but will be automated soon (within a few days)
 

Best performers : 

The home page has been enhanced with a best performers section. A ‘monthly’ overview has been introduced as well. For the July best performers see commentary at : http://www.golddrivers.com/chartpages/goldhuicharts.htm
 

Founding members

The Junior sector on the home-page contains a ‘founding-members’ button which leads the visitor to the founding member pages. Here they’ll find companies which support golddrivers.com and their corresponding profiles. (see also below)
 

Introduction Founding Members

I’m happy to introduce Samex Mining, Klondike Star Mineral, J-Pacific Gold, Endeavor Silver Corp and Canarc Resource Corp as founding members of golddrivers.com. They’ve made an important financial contribution to our site which helps us defray some costs of running this site. These companies do introduce themselves at the founding member pages :

http://www.golddrivers.com/Foundingmembers/Foundingmembersmain2.htm

All the Best,

Eric

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