Market Wrap

Week Ending 1/11/08

Gold

Gold had a good week, up $32.00 to a new high of $897.70 (+3.70%). In the last three months gold has gained approximately 20%. The second phase of the gold bull is underway.

Silver

Silver had an even better week than gold, as the white metal gained 6%. Price broke above overhead resistance to make a new high. More of the same may lie ahead.

Hui Index

The Hui had a big week, gaining over 7% to a new all-time high. It closed the week out at 475.16, up 31.41 points.

Since its August low of 284 the Hui has gained approximately 190 points or 67%. From its 2006 high of 401 it has gained over 18%, the bulk of which was done over the course of the last three months.

The weekly chart below shows the index above its upper Bollinger Band, which means the index, is extended.

RSI is approaching overbought, but bull markets can stay overbought for long periods of time - or not.

MACD has put in a positive cross over. The histograms have plenty of room to move up.

The daily chart shows the breakout above its former high water mark, forging ahead to new highs.

RSI is entering overbought territory, but that doesn't mean it can't go further into overbought territory. It simply is what it is.

MACD and the histograms are well into positive territory and are flashing overbought readings.

At the bottom of the chart is the rate of change (ROC) indicator that is just testing the 20 level, which is considered to be extended price action as well.

Xau

The Xau monthly chart below shows it approaching the upper trend line of its rising channel. So far during the bull market, this trend line has been solid resistance - defining the upper levels of all rallies.

Xau/Gld Ratio

The higher the number the better the gold stocks are doing versus gold. Since mid-December the ratio has been rising, however, it is still below its upper trend line, and has made a series of lower highs.

Hui/Gold Ratio

The Hui/Gold ratio shows pretty much the same as the above Xau/Gld chart. The chart below goes back to 2003, and shows the last higher high to have been made at the end of 2003.

In 2006 a lower high was recorded, and presently the ratio is well below its upper trend line.

If a strong bull market in the gold stocks is to continue, this trend line will have to be broken. I suspect that it will be - all in good time.

Invitation

Stop by our website and check out the complete market wrap, which covers most major markets, including stocks, bonds, currencies, commodities, and energy, with the emphasis on the precious metal markets, including individual stock selections.

There is a lot of information on gold and silver, not only from an investment point of view, but also from its position as being the mandated monetary system of our Constitution - Silver and Gold Coins as in Honest Weights and Measures.

On the main homepage are papers and articles by some of the best out there to be had. There are audio and videos on banking, the Constitution, and cutting edge news of serious interest. Many articles are archived, while others are linked.

Live time quotes on gold and silver and precious metal stocks are available, including charts for most world currencies and futures. Links to the World Bank, Central banks, International Monetary Fund, the United Nations, and much more is offered.

There is also a live bulletin board where you can discuss the markets with people from around the world and many other resources too numerous to list.

Drop by and check it out. Good luck. Good trading. Good health. And that's a wrap.

Come visit our new website: Honest Money Gold & Silver Report
And read the Open Letter to Congress

Coming in 2008 - the book Honest Money