Bill-

Thanks for weighing in on this. As my frequent posts here have indicated, I have been following this, the oils and the general commodities market with great interest over the past few days.

As stockman has queried "When to buy?" I think yours and g034s protocols for purchases make great sense. I would not know how to time entries otherwise. You can't guess this market although the "hinkiness" Monday early (10am)caused me to pull the plug on my miners. That was a departure from TA for me but something didn't "look right". Maybe it's all that observation of behaviors of the miners. I am glad I followed my gut.

I am convinced gold will roar once again. The fundamentals are all there. This week they succumbed to the technical picture and a push from forces wanting to see lower prices. It will always be so.

Regarding the commodities bull, it too should continue. I have one important caveat though. The fundamentals underlying the gold bull are not the same as for the commodity bull. Gold is money. It can rrespond (forcefully) to the weakening economic and dollar picture. The commodities need supply/demand imbalance to surge higher. If the U.S economy finally works off its excesses, it will be awhile before demand is restored. Even the marginal addition provided by a quickly expanding Chinese/Indian market will not replace the impact of a US deep recession. If that plays out, as it must some day, commodity entries may be dead money for awhile. That includes oil and the metals. JMHO.

Long: GLD (ouch!), Treasuries, and everything else hedged out the wazoo.

Pre-planned trade had me buy at 535 level. GLD only. No miners.

I am watching the market today to see if further selling into this "rally" on mostly negative economic news (being spun of course). Bond market reaction key as stockman says. If another weak close that would be a HUGE red flag.

It's all about timing, Bill. Long term, you've got it right. But, right now I can't see how buying gold is a good move. If you look at earlier periods where the long bond started spiking, as it is now, you'll notice gold falling sharply. I don't know if there's any causality with this, but we saw the same thing around this time last year and in Spring 2004. My two cents --wait until the yield on that 10-yr crests before getting in.

Bill,I like your choice of juniors.
Silver totally ignoring all this gold selloff excitment.Huge volume on gold April contract-8000,out of this 4000 in the last hour alone. Only 4 months ago 1000 contracts used to be good daily average. No doubt in my mind it is a bull market.

Cpfeiffer -

I think there is some connection between the bond yields and the gold prices that you are noticing. Mainly at least at this point in the cycle - there is not a widespread inflation fear among the public. Consumer price inflation is being marketed and sold to us as negligible and most Americans see the asset price inflation in real estate and the market as great things.

As a result when bonds sell off and yields rise - for whatever reason (be it fear of future rate increase, fear of inflation, sales of bonds by foreign holders due to dollar fears) - the increasing interest rates - introduce a bias expectation of slowing economic growth and as a result - lower inflation. Slowing inflation expectation will not treat the gold price well during this phase of the commodity cycle.

I hope that made sense. :)

Best regards,

Ben Green

Rising interest rates is a key driver for higher gold prices - until those interest rates are higher than inflation, we're not even close to that.

Regardless of the USDollar rising on interest rate differentials in the short term, in the long term the current account and government policy will lead the currency lower.

One crazy geopolical event will spike gold.

Wait for downtrends to be broken before stepping in.

Next time your gold holdings are in a power uptrend, sell into strength and you won't be so worried now.

Oh those Wiggles.

Bill

Thanks for the info to date on junior miner possibilities. As a newbie at this much has been learnt from all that have posted especially Mark M and G034 as it relates to Gold. What also would be helpful, when you have the time, is the key attributes to look for with the juniors.

I am sure price history is an indicator of what those knowledgeable in mining think of a specific company. However, in taking your advice to learn as much as you can about the industry I am struggling with what is relevant and important when comparing these junior companies. Obviously factors like, geographic location of properties, Production costs etc. are important but how do you factor in type of property/mine, exploration/production phases, ratio of Ore/Metal etc. not to mention the integrity, you have previously have touched on, when it comes to some individuals involved in mining. In short, can the info provided by the various company websites be trusted?

Thanks again for your insights and I know you have mentioned this previously too. In addition to your listing again today. For Canadians wanting to avoid $exchange costs IGT:TOR is the IAU:Amex equivalant.

GW

pay...looks good

I think interest rates are one of the key factors. But it's FALLING real interest rates, economic weakness and falling dollar that makes gold so attractive. When interest rates rise, gold becomes more UNATTRACTIVE as an alternative money.

Gold's thin market right now makes it especially vulnerable to these pushes. I have 515 as my next technical target. I would be surprised that it gets there.

I will watch the miners for their pattern weakness after they make their initial stand. They have been doing this for days. If they suddenly strengthen, that will be encouraging.

Hmm, I don't see the usual 10:30 sell orders coming. Over for today?

Interesting form 4's-

A name from the past:

CMGI INC- [CMGI] History
WETHERELL DAVID S CB 03/07/06 200,000 $ 1.33- 1.38 27,363,238 $ 271,000

The Simmons indicator strikes again:

TITANIUM METALS CORP- [TIE] History
SIMMONS HAROLD C CB 03/08/06 87,700 $ 29.01- 39.00 30,158,700 $ 3,407,908

long- cmgi, tie

cmgi was one of my favorites pre 2000, but i'm not too much on penny stocks...the only thing that would save this market was oil below 60 and what do you know...oil below 60

Clarification of my previous post AMEX:IAU = TSX:IGT

MarkM

Didn't figure you as a day trader but GLD at 535 is looking good! ... unless you are short! :-)

both TSX:XGD and HUI are up sharply to support your "encouraging" signal.

GW

All-

Thoughts on implications of rising protectionist mentality, particularly since it seems likely to get worse between now and November?

Folks, this was the surprise I was mentioning in my early morning post. Instead of hammering it more, they were going to let it recover. And look what the miners are doing. Somebody started buying up the miners. It obviously wasn't the weak hands getting back in. So we are either to believe that 535 was the floor and it's safe to get back in the water, or this is a massive con job.

markm, this is the type of action that makes a novice like me weak-kneed. i got in long ago and have been taking profits/adding to my position in a fairly timely fashion, including liquidating about 1/3 last thursday. trying to time the swings is not for the faint of heart, and i would rather just sit on a core position. given seasonal trends, it may be time for me to hold tight until mid-summer. however, bill's statements about the large cap miners -- i hold KGC, GG, BGO -- also make me think i need to reposition to the small miners. Thoughts on an entry point?

Why are interest rates rising?

I stand by my statement that rising interest rates are one of the key drivers for a gold bull.

If you doubt, look at what drove the last gold bull and what Paul Volcker did to stop it.

I am completely calm, locked and loaded. This selloff is the same game as the others over the past few years, learn how to play the game and you will prosper over the coming years as well. Bernanke is no Volcker!

Fully deployed and hoping for a catch me if you can gold rally.

gwuk-

No day trade. 535 was technical target so time to add to long position. First time I've added to GLD for months. Always appreciate a bargain. That way I can remain as calm as g034.

Marp, you have more cajones than I. Here comes some more selling. Must have been a two-Starbucks day for The Boys.

stockman, the Dems finally found a homeland security issue they could beat up Bush with. They will hammer this all the way til November if they can. As someone who used to run political campaigns, I would. Except some of the facts don't help the Dems. The protectionist game is not good for the markets IMHO.

Well, this has been an interesting morning at home. Thanks for the discussion! I'll check back in later.

markm.....the dccc never is very good at having a message.....but they may get in becaue the economy could be really looking bad around election time......but if they do it will not be because of excellent campaign plan.....personally i would like to see them gain the house or senate......i like a balance of power....i do not like one party to have control no matter which one it is

All-

That was definitely a bottom signal out of the miners today. S/T or intermediate remains to be seen. Season is still weak. Technicals of GLD still weak. But they really got oversold in the first minutes, bounced hard and then took off.

The chart from Kitco is VERY interesting on gold. It flatlined all afternoon and through the night until 6am this morning then WHAM the selling hit. It was really all over with JUST AS THE MARKETS OPENED. The rest of the day was just housekeeping. Who had the word on what bonds were going to do? Who gave the sell order? Who said to accumulate miners? The whole thing has me wondering what I just witnessed.

The downtrend from the miners vis a vis gold was broken today to the upside. Warning: It has done so before only to revert. But DAMN that was an impressive showing and the whole action today looks extremely ORCHESTRATED.

JMHO.

Bill, what driving forces are responsible for changing from the majors to the juniors, - in other words what is the thinking behind this comment - ..."the key point here, of course, is that I am opining the risk/reward advantage is no longer in favour of the major companies like Newmont (NYSE: NEM), Barrick Gold (NYSE: ABX), Goldfields (NYSE: GFI), etc." - I'd like to understand what you see here. - Sergio

A good question Sergio and right after I bought GFI.

C.Note-

I wouldn't fret about having a major in your portfolio at all. Best (IMHO) would be a mix. The juniors are going to be VERY volatile with major flameouts and the majors will offset. I will have GFI in mine I know, probably RGLD and GLG as well. Does that help?

MMaster:
Yes it does make me feel better. One thing about most of those Stocks Bill listed, they are not updated regularly on the market and some posted the next day. I don't like that feature.

C.Note-

I plan on looking hard at the new ETF. That can possibly be your core and you can trade miners around it if you are so inclined. I don't know ANYTHING about juniors and will be very cautious with them. This bull has a long way to run because the whole run to 450 was just the dollar decining as the Fed cut interest rates to nothing. The real run hasn't even started. First it decoupled from $USD, then when this little correction is over (and it may be already) the miners will really take off once the economy slows and Big Ben has to halt his interest rate campaign. I look for that in June/July when it becomes apparent even to CNBCs talking heads what is happening. Look for the anti-Bernanke remarks ("he has to do something" yadda)to begin. When they do, rate hikes will soon end and gold goes zooming.

Volatilty will increase from here.

Long: GLD

Well allllrighttty then.

Bill-

"The key to effective trading then is to watch the Relative Strength Inex (RSI) as it seeks to find a new bottom below 30 for the Weekly, Daily, and Hourly data. Then on a day of extreme weakness in the 5-Minute price data RSI, right across the board for most of these stocks, that will be the bottom."

Does this statement from your post mean that you think an RSI of 30 on weekly is in store for the miners?

Thanks.

Mark