 Gold
is OK
Richard Russell snippet
Dow Theory Letters
July 30, 2004
Extracted
from the July 29, 2004 edition of Richard's Remarks
A rising dollar
puts pressure on gold, and this morning saw gold down 1.50 to
387.50 - but as the dollar reversed to the downside gold reversed
to the upside.
Since many
subscribers are worried about gold, I turned to my faithful 20-month
and 40-month moving averages of gold. Here's the story. Both
of these very long-term moving averages are bullishly rising.
The primary or 40-month moving average of gold stands at 332.50.
The 20-month moving average of gold is far above the 40-month
MA and stands at 374.20.
In April of
this year gold surged to 432. In April the 20-month MA stood
at 366.90. That put gold 18 percent above its 20-month MA, which
is too much. The result has been the current period of backing
off and consolidation. But all this is occurring well above
the rising 20-month moving average for gold.
Russell
conclusion
-- Gold is OK. The bull market in gold is intact.
By the way,
I find short-term analysis of gold very difficult and often deceptive.
The reason is that gold is probably the most "emotional"
of all tradeable items. Everybody has an opinion about gold,
and the opinions are usually quite "strong." As a result,
I'd much rather depend on my very long-term studies, as sited
above.
Richard Russell
Dow Theory
Letters
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