GOLDBUGS AMEX Goldbugs Index (GOLD)

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Hey Jim,Time to start getting serious in long/trading positions soon.~http://www.marketwatch.com/news/story/gold-futures-close-lower-turn/story.aspx?guid=%7B3EF27CC1%2D7918%2D4BA5%2DABC7%2D3FD121D4FD02%7D.For some reason the %7d won't copy.Here is the story:
METALS STOCKS
Gold futures drop $36 in three days
Prices volatile after Fed rate decision and statement
By Myra P. Saefong, MarketWatch
Last update: 4:29 p.m. EDT Aug. 5, 2008Comments: 91SAN FRANCISCO (MarketWatch) -- Gold futures fell more than $21 an ounce on Tuesday, tallying a three-session losing streak of more than $36 an ounce as prices sank to their lowest levels since mid June.
The metal followed a decline in oil prices and saw pressure from U.S. dollar strength, which eased demand for the precious metal.
Gold prices moved higher in electronic trading on Globex immediately after the U.S. Federal Reserve kept interest rates unchanged at 2%, then moved lower again. The Fed gave no sign that it plans to change policy in the foreseeable future. Read The Fed.
The Fed made its announcement at about 2:15 p.m. EDT -- after regular trading on the New York Mercantile Exchange closed.
Gold for December delivery finished Tuesday at $886.10 an ounce on Nymex, down $21.80, or 2.4%. It's down $36.60, or 4%, from the close of $922.70 on July 31.
The contract last traded at $882.50 on Globex as of 4:10 p.m. EDT. It had climbed as high as $903.90 earlier.
"The Fed meeting does nothing to alleviate the continuing exodus from commodities even though the central bank held its cards very close to the vest," said Jon Nadler, a senior analyst at Kitco Bullion Dealers. "September's meeting, however, might be quite a bit different in both tone as well as results."
Then again, the Fed statement "indicates it is returning to monetary wimp mode," said Ned Schmidt, editor of the Value View Gold Report. The Federal Open Market Committee "is not going to raise rates till inflation or dollar depreciation reaches massive proportion."
So the "dollar will return to [a] bear market, and gold will make a new high by October," said Schmidt, in emailed comments.
Overall, "continued weakness in oil, dollar strength and firm equity prices will keep gold under pressure in the short-term," said peter Grant, a senior metals analyst at Centennial Precious Metals. "Good physical interest at these levels and the proximity of major support at $850/$845 are seen as limiting factors."
But David Beahm, a vice president at Blanchard, a coin and precious metals retailer, said that based on an overall weak economy that shows no signs of making significant improvements in the near term, "Blanchard still sees gold reaching $1,150 by the end of the year.
Dollar's toll on gold
For now, "the dollar has and continues to be the main influence on the gold price, so when today it pushed back to the upper limit of its trading range, it influenced the gold price to the downside again," said Julian Phillips, an analyst at GoldForecaster.com, ahead of the Fed announcement.
"The factors pushing the price down are not in ... substantive enough to change the trend of the gold price," he said in emailed comments. "Only a sound dollar, healthy global economic growth, low inflation, confidence in the world monetary system will change this trend, but then this is the sort of thing dreams are made of."
The dollar index (DXY:US Dollar Index Future - Spot Price
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Last: 73.87+0.50+0.68%

10:15pm 08/05/2008

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DXY 73.87, +0.50, +0.7%) , a measure of the greenback against a trade-weighted currency basket, was at 73.92, compared with 73.485 in late North American trading Monday. See Currencies.
Gold traders "have to look at the dollar and try to determine if the rally is for real or if it is just a correction in a bear market," said Dale Doelling, chief market technician at Trends In Commodities. It's likely the latter "as my technical indicators are beginning to signal that a bottom in gold is near."
"A test of $875 should flush out the weak longs and allow the market to mount a sustainable rally, possibly to new highs," he said in emailed comments.
Weakness in oil helped fuel the dollar's strength. Crude for September delivery fell $2.24 to close at $119.17 per barrel on Globex. See Futures Movers.
"With paper oil prices breaking, that influence on gold prices is being removed," said Schmidt.
"Gold will now begin to gradually refocus on the longer term fundamentals," he said. "The price of paper oil breaking does not remove the massive recession risks faced by the U.S. and Canada."
Platinum's dull shine
Against this backdrop, platinum prices gained ground, recovering part of Monday's more than $92 drop to levels not seen since January. October platinum tacked on $21.50 to close at $1,584.50 an ounce..
Slowing demand for the metals from car manufacturers has been a key concern for platinum. "The impact of dropping car sales and the move to smaller cars is discouraging investment in the metal as industrial demand falls," said Phillips, who is also an analyst at SilverForecaster.com. "The main demand for platinum comes from its use in controlling emissions from exhausts."
September palladium added 55 cents to end at $353.90 an ounce. But September copper futures closed down 2.3 cents at $3.417 a pound and September silver fell by 56.8 cents, or 3.3%, to close at $16.572 an ounce.
CRB 398.41, -3.57, -0.9%) , a benchmark gauging the prices of major commodities, was down 0.9% Tuesday.
Myra P. Saefong is MarketWatch's assistant markets editor, based in San


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