Sunday, December 18, 2005

WEEKLY MARKET UPDATE; Sunday, December 18th, 2005.

Sunday, December 18th, 2005.

*Gold & Silver Report*
Gold and Silver Peak

Executive Summary: Gold and silver reached a fevered, climatic blow-off on Monday and declined the remainder of the week. Gold finished at: $502 while silver dropped to $8.50. Gold lost $24, while silver dropped by $.49. The XAU consolidated for the second week. The dollar collapsed below its month long consolidation: Dollar Chart.

Gold Stocks ($XAU)
Short Term: The $XAU declined within a higher trading range: Daily Chart.
Medium Term: In the weekly chart, the market closed near the break-even point: Weekly Chart.
Long Term: The fundamental argument for a bull market in precious metals and the $XAU remains sound. Rising interest rates are common during gold uptrends, e.g. rates rose during the 1970's bull market. The $XAU is above the neckline of a bullish: H&S Pattern In The Monthly Chart.


Gold and silver are blowing off steam after reaching a major market peak. A re-test of the highs remains possible, however, new highs are not expected at this time. Junior gold and silver stocks appear more attractive due to their lack of participation in the recent rally. The former precious metals forecast has been fulfilled: The former precious metals forecast has been fulfilled: "..expect the next few months to yield $500+ gold, silver in excess of $9 per ounce and an $XAU price of 135." Jim Puplava and Frank Barbera are selling or have sold their positions in gold silver and large cap companies. Protective stops are warranted at this time. Thanks for reading. CW

For additional gold and silver analysis: Jim Puplava, Jim Sinclair, Clive Maund and The Schultz Gold Stock Index.

*Stock Market Report*
*Mixed Market Results*

Executive Summary: The Dow Jones Industrials, S&P 500 inched higher while the Nasdaq consolidated this week: (click to view the charts) Nasdaq, Dow Jones, S&P, Dow Transports, and Semiconductors. Market volatility continued to decline making fresh new low: $VIX and $VXN. The price of oil closed at the break-even level: $59 per barrel.

MARKET OUTLOOK: The markets are all consolidating. Watch for a break-out in the major indexes. Thanks for reading. Chris Waltzek

Trading Coach: Never risk more than 2% of account equity on any trade - determine position size using protective sell stops. For daily trend updates: Click Here. Robert Colby's Daily Market Update: Click Here.