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Gold-bugs, "think gold 400" Richard Russell Dow Theory Letters June 21, 2004 Extracted from the June 19, 2004 edition of Richard's Remarks Last week was a decent week for gold, and I want to show you what the daily chart of gold looks like. What we see here is a "head-and-shoulders bottom." The left shoulder recorded its low on April 29, the head recorded its intra-day low on May 10 at 372.50. The current right shoulder hit a low of 384.20 on June 14 (all based on the August contract). On Friday August gold gapped up above its 50-day moving average (391.90) -- to close at 395.70. That was impressive action. In order to break out of its head-and-shoulders bottom pattern, August gold would have to closed above 400. I would not be shocked if that was to happen next week. As for gold stocks, they've taken a beating, and they are now gun-shy or I should say "gold-shy." By this I mean that the gold shares want to see gold actually close at 400. And just as important -- remain above 400. In other words, the gold shares are now from Missouri. They're saying to gold, "SHOW ME." I suspect that very shortly gold will show them by moving above 400 and staying there. By the way, the 200-day moving average for gold stands at 398.60. Thus, a price of 400 for gold would not only break the metal out of its head-and-shoulder bottom, but it would take gold above its important 200-day moving average. So gold-bugs, "think gold 400." The number 400 is the current important number for the yellow metal. Richard Russell Dow Theory Letters © Copyright 2004 Dow Theory Letters, Inc Richard Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business. He offers a TRIAL (two consecutive up-to-date issues) for $1.00 (same price that was originally charged in 1958). Trials, please one time only. Mail your $1.00 check to: Dow Theory Letters, PO Box 1759, La Jolla, CA 92038 (annual cost of a subscription is $250, tax deductible if ordered through your business). _________________ 321gold Inc ref: 08679