Gold

HIGHLIGHTS OCTOBER 2005 - JANUARY 2006

Oct 21, 2005 HUI – Not Dead Yet!
http://www.golddrivers.com/GDRUpdates/gdrupdate20051021.htm

Investors thinking about shorting gold stocks these days should pay attention to what happened in 2003, there’s no rush to sell imo.

Conclusion : There’re a lot of similarities with July 2003 indeed today and the relative HUI chart does not rule out a repeat of this scenario (HUI blow-off like what happened in the second half of 2003) since previous major HUI highs occurred at much higher rHUI levels (>1.45 vs 1.05 current)

November 02, HUI Break out imminent?
http://www.golddrivers.com/Premium/goldhuialerts/GHA20051102/goldhuicharts20051102.htm

Although the overall trend of the Gold/HUI ratio is down since May we saw a nasty up move during the month of October. The Gold shares were lagging the price of Gold again. But it seems now that the up move in October is on its lat legs and the Gold/HUI ratio is bound to continue its established downward trend again. That's good news for the gold shares. Now when taking peek at the HUI chart iself, it seems on the verge of breaking out of its latest triangle formation. If that's to happen, the HUI is on its way to challenge its all time high of 258

November 09, 2005:
HUI Break out Imminent? Part II
http://www.golddrivers.com/Premium/goldhuialerts/GHA20051109/goldhuicharts20051109.htm

The HUI catching up on Gold simply means a HUI outperforming Gold. a HUI outperforming gold means a decline in the Gold/HUI ratio. Do we see a downward trend in the Gold/HUI ratio since May ? Sure we do, see chart below:

Although the overall trend of the Gold/HUI ratio is down since May we saw a nasty up move during the month of October. The Gold shares were lagging the price of Gold again. But it seems now that the up move in October is on its last legs and the Gold/HUI ratio is bound to continue its established downward trend again. That's good news for the gold shares. Now when taking peek at the HUI chart itself, it seems to be on the verge of breaking out of its latest triangle formation. If that's to happen, the HUI is on its way to challenge its all time high of 258

November 18, 2005: HUI and its 250 resistance
http://www.golddrivers.com/Premium/goldhuialerts/GHA20051118/goldhuicharts20051118.htm

This setup is almost identical as in 2003 when the HUI
struggled for a long time to overcome its long-term resistance at 150,
see chart below:

December 11, 2005:
HUI Jumps to new all time High
http://www.golddrivers.com/Premium/goldhuialerts/GHA20051211/goldhuicharts20051211.htm

Many gold writers advised their clients to sell their gold stocks a couple of weeks ago since the HUI couldn’t manage to slash its long-term resistance at 250. But as our readers know, we suggested this last correction from 250 to the 220 area could be very well the last correction before blowing off towards new highs. The similarities with 2003 were striking. Now finally the HUI did manage to slash its long term resistance of 250 and its our strong believe that this marks a new up-leg which will launch the HUI towards the 300 area. The HUI is nowhere being overbought. Previous HUI highs were being reached when it stretched its 200 dma by 50 - 80 %. In order to reach that level the HUI should trade in the 315 – 350 range.

Please take peek at the chart below and see how striking the similarities are with 2003. This relative HUI chart clearly indicates a lot more upside potential for the HUI.

Conclusion:

HUI run is nowhere from being exhausted and still has much upward potential.

December 29, 2005: Junior Festival 2006 Part I