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The gold trend for early 2005 Clif Droke snippet Jan 11, 2005 Below is an extract from Clif Droke's Gold Strategies Review for Jan 2005 In last month's newsletter we looked at the the disparity between the price of gold (which at that time was at a multi-year high) and the lagging XAU gold stock index. This was a big concern for us since a negative divergence between the price of gold and the XAU is usually bearish for the gold stock sector in general sooner or later. We asked the question last month, "Is the relative weakness in gold stocks sending a message that the yellow metal is nearing a short-term peak?" Obviously this question was answered in the affirmative as gold peaked out recently and has dipped to the $420 area as of the end of the first full week of January. Our expectations for the first significant oversold rally in the U.S. dollar last month was achieved with the dollar index temporarily stopping its downtrend at the lower boundary of a longer-term downtrend channel and then rallying back up to the 83-84 area as expected. We also looked at the possibility that the dollar index might rally as high as the 85 benchmark (which is approximately the upper boundary of said downtrend channel) before encountering strong resistance and turning down again. I wouldn't be surprised to see the dollar hit 85 minimum before this latest technical rally meets with resistance. Now that gold has violated the $438 pivot mentioned in last month's newsletter and is now at the $420 area (mentioned as being the secondary downside target where the dominant short-term trend and bias lines intersect in the charts), what can we expect for the first few weeks of 2005? . . . More follows for subscribers, you can subscribe to the Gold Strategies Review ($21) here. --Clif Droke clif@clifdroke.com website, www.clifdroke.com 321gold Inc