goldtimers hard to impress...

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    Gold timers seem hard to impress

    By Peter Brimelow,
    Last Update: 12:47 AM ET Aug. 28, 2003

    NEW YORK (CBS.MW) -- What if they gave a gold rally and nobody came?

    Gold timers seem hard to impress
    Nymex gold rallies 2% to end back above $370 level
    Nymex gold ends near $367 amid broad metals stock rally
    More news for NEM
    OK, it's not that extreme.

    But gold's gapping upward yesterday -- bullion was up almost $11 at one point, to $374.50 -- does not seem to have excited the gold timers monitored by the Hulbert Financial Digest.

    Last night, the HFD recorded their average exposure at 54.17 percent.

    That's high, but far from the recorded peak of 89.6 percent.

    And, even more significant, it was unchanged from the previous night, despite gold's dramatic day.

    Even comment from the investment letters was quite modest and subdued.

    Peter Eliades of Stock Market Cycles applied his esoteric cycle theory:

    "Today's rally in Gold generated a nominal 20 week projection in the metal calling for 375.90-386.60. There is no equivalent upside projection in the XAU, however and today's high of 375.40 came very close to satisfying the lower window of the gold projection."

    Chris Temple of National Investor Update (new to the HFD but well ahead of the market over the past 30 months):

    "Gold's activities are still ruled largely by short-term traders. One reason for today's action, in fact, is that some options contracts for August were expiring. It appears that at least some of the impetus for today's surge was many of the same speculators who had expiring contracts, say, at a gold price of $365 or $370 goosed a thin market higher so as to exit the older positions at a better level. This is reason to give us a little worry that today's breakout could turn out to be a temporary wonder. I'd feel better about the gold market-and the current pricey level of gold shares-if there was more evidence that stronger, longer-term hands were a bigger factor..."

    Temple concludes: "If gold is sooner rather than later able to move above late May's high of $378 per ounce with any conviction, another $20 could quickly be tacked on. At the first sign of a loss of momentum, however-and especially if we start to see an unwinding of the record net long positions-we'll want to cut back...

    "For now, keep to your 15 percent portfolio weighting in gold shares."

    On Tuesday morning, Profitable Investing's Richard Band had been equally demanding, and wary of manipulation:

    "A showdown is approaching for gold and gold shares.

    "Looking at my charts, it's apparent the Midas metal faces stiff resistance at $370 and ounce -- and an even more formidable barrier at $380....

    "The bears (possibly including the Federal Reserve) fervently hope they can stop the metal before it breaches either obstacle. Bullion dealers and other large commercial interests have placed huge bets on the short (sell) side of the gold futures market. Meanwhile, large speculators (managed funds, for the most part) are buying futures at a record pace. One side of this trade is going to prove spectacularly right, and one side will lose its shirt."

    Band said any gold move had to come "within the next two weeks" and advised baling out if bellwether Newmont Mining (NEM: news, chart, profile) didn't top $40 by Sept. 9.

    Newmont closed Wednesday at $39.16.

    All this is right up Richard Russell's street. Dow Theory Letter's septuagenarian superbear exulted last night:

    "The public is not even aware the gold is rising in terms of dollars....And that's how I know that we're still in the first phase of the gold bull market....

    "Today was a big day for gold shares, and happily was not commented on by CNBC. We'll see if the Wall Street Journal even mentions gold tomorrow.

    "And the 'stealth' bull market in gold continues."

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