Gold's strong start

The following comments were sent to Myra P. Saefong, Financial Writer with Marketwatch.com, on 1/12/06 at 8:43 AM.


On December 20th, 2005, the FEB GOLD futures reached a significantly oversold condition which led to the most recent rally of more than $60 from low to high. The market is now in a highly overbought condition which would lead me to believe that some short-term weakness may ensue. If I were an investor who's had his head in the sand for the last 3 years and was just starting to look at the precious metals markets to invest some of my capital, I might want to hold off on making my first purchase. For those of us who have been actively buying for some time now, I can only say "No worries, mate!" These trends have some serious "legs" to them and contain all the elements that trend followers look for when making trading decisions (Strong fundamentals, strong technicals, and strong investor sentiment). If the early going is any indication then 2006 is going to be a year of enormous returns for Precious metals investors and, I believe, the best is yet to come.

Dale F. Doelliing
Chief Market Technician
Trends In Commodities