we're sure not going lower! - sinclair

  1. dub
    33,892 Posts.
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    Re: Chairman's Corner - Wednesday, January 22, 2003
    Are We Trending? Or Are we Chopping Sideways? We Sure Are Not Going
    Author: James Sinclair
    I have to call it the way I see it and all I see is what I suggested to you that we would see. Having passed that period during which a potential short but hard downdraft was possible in the gold price, we have simply moved into the higher chop level ($357-$363) outlined for you in my recent communication.

    The fulcrum level I pointed out to you that would first appear as a resistance to appreciation, has proven correct to the penny. Yes, it is $361.50. A recent communication I received said: "Come on Jim, you are good but not that good. It has to be your offering on the high and your bid on the low side in the cash gold market that is bounding this chop plus your platinum play that caught some shorts the other day recently for a total $26 up move.

    " My answer is: "I will never tell."

    Opinions are flying high and low. Each person who writes has a different view of this market. Well, repeat after me: "We are in a very long term bull market in gold." Gold is coming back into the monetary system and that may well occur by June of 2004. But if it does not by then, be assured it is coming. Malaysia will deliver gold remonetization by this coming June. After the Malaysian Dinar is operating, the argument about whether gold is going to be remonetized ends because it is remonetized. Remember the rule: "When gold moves towards a commodity, it moves towards worthlessness. When gold moves towards monetization or functions as money by public demand, it moves toward infinite worth-more-ness with a price to be determined only by the circumstances of the moment affecting the currency which is the world settlement mechanism." That is the rule. That is the law.

    The event of gold remonetization is very good for the gold price and even better for the serious gold mining company that is in fact running a business, not playing the ounce-counting game. Right now the gold share community is in transition between non-commitment based on a lack of understanding of what they are doing in gold and real commitment. From $372 to $410-$430, the gold shares, in my opinion, will
    outperform gold. That is not to far away.

    The problem in shares is the lack of serious gold companies out there along with a preponderance of management that simply hasn't understood the
    message. No more insider option pump and dump games no matter how big or small your company is. Stop the multi-company singular management which,
    when a property is found, has to result in a shell game. In this case, the pea is the property and under what company it goes is the shell.

    Royal gold has proved that earnings based on gold are more important than ounce counting as a means of evaluating an enterprise. Finally, stockholders do not want to hear derivative hedges in a bull market in gold. Those major hedgers would be well advised to do whatever financing is required to pay off those non-recourse loans that contractually require that they maintain a short gold position for the life of the non-recourse gold project loans.

    I believe the only reason that gold hedges are still on is because the hedge is too complicated to find anyone stupid enough to take the other side to neutralize it or because they are contractually required to maintain non-recourse loans. Of the 112 gold companies recently listed as to performance in 2002 by mine-web.com, it is my feeling that less than ten of them are serious businesses run by serious people.

    Conclusion: If we are trending now then you abandon the Williams %R indicator and only use the MACD and Momentum for direction. If we are
    chopping, then you use the Williams %R as if it is the word of God. We will end the chop the day we close over $363.00. Your first indication will be the move above $361.50 at 1PM in the US. In my opinion it will not be long before that occurs.

    Click on the following link to view full editorial including associated chart:

    I am also sending you this important National Post article on Greenspan and his new found praise for gold.

    Associated File:
    464 KB in size, approx. 3 minutes, 41 seconds to download at 28.8Kbps

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    Message sent on Wed Jan 22, 2003 at 4:47:50 PM Pacific Time

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