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Gold versus gold stocks in DecemberClif Droke
snippet Below is an extract from Clif Droke's Gold Strategies Review for December Gold posted another extremely impressive performance in November, which admittedly took me by surprise as I was expecting a more subdued market environment for the month. The XAU gold/silver index, however, pretty much performed to expectations in making it to our conservative 110 area upside target and then encountered resistance heading into early December. XAU pulled back to its current 101-102 area, while gold futures are currently around $455 as of the start of the first full week of December. This disparity between the
soaring price of gold and the lagging XAU has been the topic
of much discussion among gold stock traders of late and is the
focus of this month's lead commentary. While the gold price has
kept well above its rising 30/60/90-day moving averages (the
dominant short-term trend, bias, and momentum identifiers), the
XAU has recently broken below its 30-day MA and is currently
testing the 60-day MA, which represents a testing of the short-term
trend. Is the relative weakness in gold stocks sending a message
that the yellow metal is nearing a short-term peak? Or is this
merely a temporary correction of an overbought correction in
the gold stock sector, with the uptrend to be resumed shortly? More follows for subscribers, you can subscribe to the Gold Strategies Review here. --Clif Droke ©2002-2004
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