Gold has bottomed, huge rally likely


10:05p EDT Friday, September 24, 1999

Dear Friend of GATA and Gold:

I think you'll enjoy this commentary posted today at by their foremost analyst,
Thom Calandra. It is powerful evidence that market
sentiment is changing in our favor.

Please post this as seems useful.

Gold Anti-Trust Action Committee Inc.

* * *

A technical take on -- oh no! -- gold

By Thom Calandra
CBS MarketWatch

SAN FRANCISCO (CBS.MW) -- I ran into technical analyst
Mike Hurley at the other day. He's
got some news for the bugs -- the gold bugs.

Hurley scans charts for investment opportunities, then
publishes his findings at the San Francisco investment
bank's Web site. Hurley has "sizing up the technicals"
for 15 years at various San Francisco investment banks
and research firms. One-year: XAU gold index and BKX
bank index

Hurley was taking a look at the Philadelphia Gold and
Silver Index (XAU), a collection of the largest North
American gold companies. And why not? That big London
gold auction this week -- the second by the Bank of
England -- was more than eight times over-subscribed.

Gold prices, while in the dumps, have responded well to
the British central bank's firesale of the precious
metal. Gold sold for more than $270 an ounce in New
York futures trading on Friday. That's the active gold
contract's highest point since June 8.

Hurley sees "accumulation" in some gold stocks this
summer and now autumn. That means that Wall Street
institutions look like they are willing to buy the
stocks in increasingly large portions -- and on
upticks. That hasn't happened in a long, long time.

The so-called XAU gold and silver index, meanwhile, has
a chart that intrigues Hurley.

"The XAU looks extremely positive in its own right and
may be forming what technicians call a saucer bottom, a
pattern commonly found at major lows," he says.

Gold stocks such as Newmont Mining and Barrick Gold
often make sharp moves that are tied to the price of
the metal. Nothing new there. Hurley goes a step
further and contrasts the XAU with the New York Stock
Exchange's Financial Index of bank stocks. Financial
stocks generally lead the U.S. stock market up -- or
down. And gold stocks generally do the opposite of
financial stocks.

These days, the gold index and the bank index are going
their separate ways -- only the gold chart looks like
it's rising and the bank index looks like it's falling.
That means some investors might see trouble ahead for
the broad market -- for whatever reason (that's another
column, folks).

"Investors and traders seeking a hedge against a
stronger-than expected-economy and/or Y2K turmoil may
now be seeing the type of investment entry that rarely
comes along," Hurley says.

That would be gold. The yellow metal that has lost lots
of investors lots of money in the 1990s. Unless they
were short-selling the stuff.

Enough said.