Stay the Course

2003-OCT-05

The drubbing that gold received on Friday no doubt has caused everyone a lot of soul searching. So I have prepared this alert to put Friday's action into its proper perspective, and to do this, I have prepared the following chart, which presents gold's weekly close in New York.

What is most striking about this chart is that Friday's sell-off is barely visible. Gold clearly remains well within its important long-term uptrend, above its 200-day moving average, and above its recent breakout point of $366. In short, there is nothing wrong with this chart, so by implication, there is nothing wrong with gold, which remains in its major long-term uptrend.

It is important to note that gold's drop occurred only in New York. In fact, gold closed in London at $382.75, $13.35 above the New York close only 11/2 hours later. So what happened? The shorts - probably led by government intervention - raided the market. For more information on this raid, see: www.fgmr.com

So what do we do? Simple, we stay the course. Continue to accumulate gold, as declines like the one seen on Friday enable you to get more metal for your dollars. And given the growing uncertainty about the dollar and its bleak prospects, gold is still the place to be.