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*** Gold related "snippet" from Richard Russell ***

Dow-Gold Ratio
Richard Russell
snippet
Dow Theory Letters
March 1, 2003

Extracted from the 28 February 2003 issue of Richard Russell's Dow Theory Remarks

Gold --One of the features of gold that I watch is the number of ounces of gold that the Dow can buy at any given time.

For instance at the ratio high in August of 1999 the Dow would buy 42.1 ounces of gold. That was the peak of strength for the Dow in terms of gold.

In January 2000 the Dow would buy 34.4 ounces of gold.

In January 2001 the Dow would buy 40.9 ounces of gold.

In January 2002 the Dow would buy 35.1 ounces of gold.

In January 2003 the Dow would buy 21.8 ounces of gold.

As of today, February 28, 2003 the Dow will buy 22.6 ounces of gold.

As you might guess, I keep a 200-day moving average of this ratio. The MA has continued down ever since mid-2000. As of today, the 200-day MA stands at 26.2 with the ratio of the Dow to gold well below its 200-day MA.

The conclusion is that on a trend basis the Dow is buying less and less in terms of gold. At today's ratio of 22.6, the ratio is down 34.3% from its high of August of 1999.

Russell Prediction. Of course, all market predictions are ridiculous because "the market can do anything."

Despite that, I offer this prediction. We'll see the Dow-gold ratio down to or at 1-to-1, and we'll see the Dow and gold cross at a value of around 3000. When? Within a decade.

More follows for subscribers. . .

Richard Russell
Dow Theory Letters
© Copyright 2003 Dow Theory Letters, Inc

http://www.321gold.com/editorials/russell/russell030103.html

Regards,
Dan

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