"establishment" money going into gold majors

  1. 9,081 Posts.
    "June 18, 2003

    Gold Market Summary

    There's a time to be skeptical and a time not to be. Gold shares are reflecting a significant up-tick in market sentiment and the motivating factor appears to be renewed interest from the "establishment" investment crowd.

    Their interest in gold shares is based on the assumption that a weaker dollar is positive for general equities and that inflation is desired by all central banks.

    That being the case, they are investing in gold shares first and physical gold second. Gold shares are first on their list because the shares are severely undervalued to gold bullion at the moment by about $50 per ounce. By that I mean that they are being valued as if gold was trading at $308.

    Mineweb's Tim Wood had a word or two for the gold bulls in a bullish article that was posted 2003/06/17 on: www. Mineweb.com. Welcome aboard Tim. Rather than nit picking Tim's article, I prefer to thank him for recognizing the shift in the marketplace as new investors discover gold.

    I believe the finest move the Romans made when acquiring new territory was to welcome its inhabitants as citizens of Rome. With that historical precedent in mind, I'd like to personally welcome Tim to the Gold Community. I expect Andy Smith will join at some point in the future but you can never be sure of anything with a gold sector analyst.

    Cynicism be gone!

    Tim's gold share article, "Newmont at $180," is simply DAMN BULLISH. I thought I had wandered off the beaten path yesterday by asking the Gold Community if triple digit RGLD was possible based on a 21-year Reverse Head & Shoulders formation concluded and branded correct by pull back/move away/up. But Tim managed to trump even that.

    So here are my conclusions:

    1/ A new crowd has entered the gold game so the old rules will not work as well as they have up to now.
    2/ The Ratio gold trade is dead.
    3/ The Ratio Gold traders are deader. More dead? Whatever!
    4/ Therefore, the 8 week gold cycle is reduced in its influence.
    5/ All that said, I am bullish on both gold shares and gold bullion, period."

    - Sinclair.

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