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Gold is cheaper than ever relative to oil, Resource Investor reports

Section: Daily Dispatches

By Peter Brimelow
CBSMarketWatch.com
Monday, June 27, 2005

http://www.Marketwatch.com/news/story.asp?
column=Peter+Brimelow&siteid=mktw&dist=

NEW YORK -- Gold grinds on -- but a new gold vehicle has the
newsletters quarrelling.

Bullion finished last week above $440, after exceptional volume,
reflecting an extraordinary clash between buyers and sellers.

The Hulbert Gold Newsletter Sentiment Index (HGNSI), which
represents the average exposure to the gold market among a subset of
short-term gold timing, remained at 43% on Friday night, as it had
been the previous week.

This represents a sharp swing from negative 30% in April, although
bullion itself is less than $20 higher. Mark Hulbert says that, on a
contrary opinion basis, this is "at best neutral."

But sentiment as measured by HGNSI is far from excessive: the
HGNSI's range is from 90% to negative 31%.

Writing from their charting perspective, the Aden sisters said
recently in their Aden Forecast that gold is "now looking good from
a European and Japanese perspective, and it's building a solid
base. ... Gold would be very strong above $447 and a new high would
occur above $457."

And from a more fundamentalist perspective, Sy Harding reached a
similar conclusion in his Street Smart Report:

"The gold sector has been rallying in spite of the continuing rally
in the U.S. dollar. That is unusual. For a number of years gold has
been moving opposite to the dollar so consistently that we have used
the overbought/oversold condition of the dollar, and its likely
direction, as one of our tools in timing gold.

"This situation of having gold rally in spite of the continuing
strength in the dollar has us watching. It indicates that either the
dollar rally is likely to end very soon (which would be a big
positive for gold) or that inflation and currency uncertainties are
due to worsen gold is traditionally seen as a safe haven in times of
significantly rising inflation or turmoil in currency markets). Or
it could mean the gold rally is not sustainable.

"So we want to see gold break out above $445 and establish a higher
high for the year."

I'm quoting the Aden Forecast and Street Smart Report because they
are among the very respectable total of seven letters, among those
followed by the Hulbert Financial Digest, that are currently
recommending the exchange-traded fund StreetTRACKS Gold Shares (GLD).

(The others are: Global Investing; Outstanding Investments; Martin
Weiss' Safe Money Report; Investor's Intelligence ETF Review; Real
Wealth Report.)

I don't see a lot of discussion of Gold Shares in these letters. For
example, the latest issue of Outstanding Investments just lists it
as "Buy/defensive holding."

Gold Shares seems just to be taken at face value as a proxy for
bullion.

But, in what seems to be a technological/methodological/generational
shift within the gold bug world, another newer group of gold-
oriented services are bitterly critical of Gold Shares. They include
Reg Howe's goldensextant.com, Bill Murphy's lecafemetrople.com (full
disclosure: my brother John Brimelow is published there), and James
Turk's Freemarket Gold & Money Report.

As Turk put it recently:

"My point has been that GLD is not an alternative to owning physical
metal. Rather, it is just another paper alternative promising to
deliver gold. ...The asset reported on GLD's balance sheet
says: 'Investment in Gold.' It does not say just: 'Gold.' By
declaring GLD's asset to be an 'investment,' it is an easier hurdle
to meet for auditing purposes. Investments in gold can be nearly
anything gold related, and for example, include gold certificates
and other promises to pay gold. ... So do not view GLD as an
alternative to physical gold, because it's not."

Strangely, I don't see any discussion of this point in the more
traditional gold letters -- yet.

But if gold goes on, watch this space.

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http://www.GoldSeek.com/

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http://www.DailyReckoning.com

http://www.goldenbar.com/

http://www.silver-investor.com

http://www.thebulliondesk.com/

http://www.sharelynx.com/

http://www.mininglife.com/

http://www.financialsense.com

http://www.goldensextant.com

http://www.goldismoney.info/index.html

http://www.howestreet.com

http://www.depression2.tv

http://www.moneyfiles.org/

http://www.howestreet.com

http://www.minersmanual.com/minernews.html

http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html

http://www.goldcolony.com

http://www.miningstocks.com

http://www.mineralstox.com

http://www.freemarketnews.com

http://www.321gold.com

http://www.SilverSeek.com

http://www.investmentrarities.com

http://www.kereport.com
(Korelin Business Report -- audio)

http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)

http://www.resourceinvestor.com

http://www.miningmx.com

http://www.prudentbear.com

http://www.dollarcollapse.com

http://www.kitcocasey.com

http://000999.forumactif.com/

http://www.golddrivers.com/

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Subscription sites:

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http://www.goldinsider.com/

http://www.hsletter.com

http://www.interventionalanalysis.com

http://www.investmentindicators.com/

Eagle Ranch discussion site:

http://os2eagle.net/checksum.htm

Ted Butler silver commentary archive:

http://www.investmentrarities.com/

----------------------------------------------------

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WHO HAVE SUPPORTED GATA
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Greg Westgaard, Sales Manager
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178 West Service Road
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1702 S. Highway 121
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fax: 952-925-0143
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info@mocoin.com
314-965-9797
1-800-280-9797
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6139 South Rural Road
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Metalguys@aol.com

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15018 North Tatum Blvd.
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http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com

The Moneychanger
Box 178
Westpoint, Tennessee 38486
http://www.the-moneychanger.com
Franklin Sanders
1-888-218-9226, 931-766-6066

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