Gold Buying Opportunity
Special Alert Tuesday July 6, 2004 2PM EDT

Peter Grandich
July 7, 2004

U.S. gold investors returned from holidays only to find another "stealth-like" attack on the Comex. While the press will always get somebody to give some sort of explanation, yours truly saw no fundamental
reason for gold to suddenly sell-off. Because the ISM data was released shortly before gold decided to fall off the cliff, the natural tendency is to think it had something to do with the decline.

Trust me, it didn't!

Gold has been completing an intermediate bottom in its secular bull rise that began a couple of years ago. The environment for it hasn't been this good for over 20 years. Geopolitical events now have a lasting and supportive effect. People are realizing that the western world has not faced an enemy like it does now.

Past enemies wanted to defeat us, but they didn't want the world to blow up in exchange for their victory. The enemy now not only doesn't care about the present world, but also actually thinks its god will reward them for destroying it.

And while the supply versus demand scenario is more attractive for base metals, the lack of aggressive gold exploration for years, combined with the market's ability now to absorb central bank selling (and the threat of it), gives gold a strong fundamental argument. I especially like the way the Euro is trading and believe it can break above 125, a level I think can accelerate U.S. dollar selling overall and benefit the metals.

Throw in oil simply correcting recent gains and likely heading to $50, and we have all the makings of a run to $500 on gold.

Today's retreat is strictly a buying opportunity.

July 6, 2004
Peter Grandich
Grandich Publications
P.O. Box 243
Perrineville, NJ 08535
phone: 732-642-3992
email: Peter@Grandich.com

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