The McClellan Market Report
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Gold

McClellan Financial Publications, Inc
Posted May 4, 2012

Gold prices had been hurt slightly by an overnight rally in the dollar. And who could blame currency traders for seeking shelter in the dollar, as Europe contemplates the question of whether the EU’s collective financial might is sufficient to save Spain?

Since I have been talking about Rydex fund assets today, it seems fitting to take a visit to the total assets data for the Rydex Precious Metals Fund. The final chart shows that investors who use Rydex funds really don’t like the Precious Metals Fund as they once did. It is hard to imagine an uglier looking chart, which is another way of saying that it can only get better (since it can hardly get worse).

This is not a message for week-to-week timing, but rather a huge bullhorn statement that investors don’t really like gold stocks at all. That means they can only like gold stocks more, if they cannot like them any less. I see this as a huge secular turning point for the fortunes of gold stocks, because it is unnatural for there to be this much aversion to this sector. And with the passing of the 13-1/2 month cycle low and the start of a new cyclic up phase, we should see a big shift back toward people thinking positively about gold again.

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Written May 2, 2012
Tom McClellan
Editor, The McClellan Market Report
email: tom@mcoscillator.com
website: www.mcoscillator.com
(253) 581-4889

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