Tuppence Worth Donations

[gotmilk]

Harry Schultz Letter http://www.hsletter.com/

September 21, 2008

Harry Schultz of the International Harry Schultz Letter is an enterprising traditional gold bug who has adopted much of the radical critique. Schultz is quite often cautious about gold's short-term prospects. But for some months he has been positively apocalyptical about financial system risk.

Writing on Tuesday with gold around $780, Schultz was once again relatively cautious about gold near-term prospects: "Gold bullion has so far held crucial $750 uptrend line support from its July 2005 low, helped by an extreme oversold condition and rapidly deteriorating troubles in the financial markets. However, we repeat that the constancy of any gold rebound-cum-reversal will depend largely on the U.S. dollar, which requires a two-day close below December $78.30 to destabilize the bulls, and again below $76.70 to confirm a significant U.S. dollar top. Unless these levels are breached, any strength in gold bullion will remain suspect."

The US Dollar Index closed at 77.67 on Friday.

But Schultz also warned: "As the U.S. dollar moves back to the receiving end of its own 'misdemeanors' and its July rally-leg teeters dangerously, it's less likely that global central banks, frantic to exit huge U.S. dollar reserves, will act with the same former restraint and co-ordination. In fact, we could see a mad dash for the U.S. dollar fire escape and potential 'moon-shot' for gold."