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Quick note on gold

Technical observations of

Bob Hoye
Institutional Advisors
posted April 14, 2005

The gold market is now into the time window where we can anticipate an interim low.

Bullion prices have been in a tight range for the past three weeks. Ideally, we will see another test of the $422 low or take it out in a marginal manner (but holding above the Feb 7th low of $411) prior to the next significant advance. The long-term MACD (34,89,9) continues to be monitored for a buy signal, but more patience is required.

The precious metals stocks, as measured by the XAU and HUI indices, have taken out the lows of March 29th. At today's low they measure as potentially completed 5 wave moves down from the March 9th highs.

If they can quickly close back above the mid point of the recent consolidation (which works out as XAU- 93.22, HUI-199.48) then it would be considered bullish for the sector with risk to the current lows. If they languish down here then we will keep an eye out for a bullish divergence with stocks outperforming bullion as an indication of a pending upside reversal.

Bob Hoye
Institutional Advisors


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