Re: [CANSLIM] gold rally

From: rolatzi <rolatzi@yahoo.com>
Subject: Re: [CANSLIM] gold rally
Date: Mon, 25 Mar 2002 13:20:03 -0800 (PST)
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I have to place a dissenting opinion on gold.  I have been
investing in gold mining shares in varying degrees for 9 or
10 months and it is practically the only sector that has
performed well.  It is a reasonable investment now for the
following reasons.  
1. In times of uncertainty, people consider it to have a
store of value.  
2. It is a hedge against inflation.
3. It is a hedge against deflation.
4. If the US dollar has peaked, gold can hedge a decline in
the value of the US dollar.
5. In case of a deterioration in the middle east, there are
many arab oil prodducing nations and individuals that will
turn toward gold instead of holding as many dollars.
6. China this past year has liberalized the trading of gold
and has made it easier for its citizens to hold gold.
7. The Chinese economy is one of the most rapidly growing
in the world and traditionally before the communist
revolution China considered gold as an important store of
value.
8. India has a growing middle class and buys precious
metals for gift giving and for its storage value.
9. The economy of Japan has become very uncertain, interest
rates paid on savings miniscule, the insurance on bank
holding declining to $75K maximum has lead Japanese to
begin buying gold.
10.  Gold mining shares and the price of gold have been in
a 10 or 12 year bear market, had become very undervalued
and has been forming a bottom for the last year and a half.
 
Rolatzi

- --- Tom Worley <stkguru@bellsouth.net> wrote:
> thanks, Robert
> 
> sounds like another sucker rally to me. Until the economy
> truly picks up steam, there is unlikely to be any real
> consumption demand from manufacturers for gold.
> 
> Tom Worley
> stkguru@bellsouth.net
> AIM: TexWorley
> ----- Original Message ----- 
> From: Robert McGill 
> To: canslim@lists.xmission.com 
> Sent: Sunday, March 24, 2002 10:03 AM
> Subject: Re: [CANSLIM] gold rally
> 
> 
> 1.  speculative fund buying triggered pre-placed purchase
> orders/buy stops & generated further buying by funds. 2. 
> expected participants in gold trade to sell into gains,
> but instead pushed it higher egging funds to continue
> adding to long positions.  3.  weaker yen against dollar
> & procrastination toward fighting deflation have rattled
> investor confidence in Japan's banking system & spurred
> demand for gold.  4.  predominant influence was stop-loss
> buying @ 294-296 which we ran through.  5.  gains in gold
> mining equites cited as supportive of rally as
> historically they are leading indicators for underlying
> commodity price.  6.  funds showed willingness to roll
> April contracts forward to June futures instead of
> liquidating them, show trader confidence of uptrend.  7.
> rally stopped at major resistance of 298.  Possible
> follow-through gains on Mon, but expected to test bottom
> of trading range 294-298 before moving higher.  8.  Move
> through 298 expectred to target buy stops above 300. 
> support for April now seen @ failed resistance of 295.
>   From: Tom Worley 
>   To: canslim@lists.xmission.com 
>   Sent: Sunday, March 24, 2002 9:27 AM
>   Subject: Re: [CANSLIM] gold rally
> 
> 
>   sorry, Robert, the page is only available to
> subscribers. Perhaps you could summarize?
> 
>   Tom Worley
>   stkguru@bellsouth.net
>   AIM: TexWorley
>   ----- Original Message ----- 
>   From: Robert McGill 
>   To: canslim@lists.xmission.com 
>   Sent: Sunday, March 24, 2002 9:17 AM
>   Subject: [CANSLIM] gold rally
> 
> 
>  
>
http://online.wsj.com/article/0,4286,SB1016818583942444200-gold,00.html?collection=wsjie/30day&vql-string=%28gold%29%3Cin%3E%28article%2Dbody%29
> 


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