Monday, January 02, 2006

WEEKLY MARKET REPORT; Sunday, January 1st, 2006

Sunday, January 1st, 2006.

*Gold & Silver Report*
Gold and Silver Recovery

Executive Summary: Gold and silver moved higher after consolidating in the prior week. Gold finished near: $515 while silver closed near: $8.80. The XAU remained range-bound for the third consecutive week. The dollar was range bound following the surge higher two weeks earlier: Dollar Chart.

Gold Stocks ($XAU)
Short Term: The $XAU was range-bound: Daily Chart.
Medium Term: In the weekly chart, the $XAU inched highest: 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 the lack of participation in the recent rally. 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." Thanks for reading, Chris Waltzek.

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

*Stock Market Report*
*Stocks Near Range Lows*

Executive Summary: The Dow Jones Industrials, S&P 500 and Nasdaq fell beneath their trading ranges this week: (click to view the charts) Nasdaq, Dow Jones, S&P, Dow Transports, and Semiconductors. Market volatility remained tame: $VIX and $VXN. The price of oil left a huge gap on Thursday morning which remained unclosed as oil ended the week above: 60 per barrel.

MARKET OUTLOOK: The markets are trading near the lower edge of their consolidations. Still watching for a break-out.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.