For the first part of the week, collapse of biggest stamp market scam since Ponzi seemed to be a big story. In Spain, authorities raided and arrested leaders of the world's largest stamp collecting firm. Early estimates are that more than $5 billion of investor funds are missing. Those that collect stamps may want to do some research into this mess, and we hope that no readers had invested in these schemes. That was the big story till word out of the Middle East over financial concerns there appeared. Stock markets in that part of the world have been collapsing, with estimates of the loss thus far put at about $400 billion. Due to heavy margin loans at banks and margin calls, fears of collapse arose. Money was fleeing banks and region.

So, what came together was excessive enthusiasm for U.S. stocks, a collapse of confidence in the U.S. dollar, money fleeing banks into Gold, forced global selling of stocks to meet margin calls and in general a swirling pit of financial emotions. By Thursday morning, the emotional finance juices were spent. CNBC cheerleaders could drum up no more buyer support for markets.

Basic Trend: $Gold Up. Investors should focus on Buy signals. Strategy: Positive, per Investment Policy of Oct 2004. Investment Policy: Looking for buy signals, and holding long-term core position.

Gold failed to carry through on Friday. Late trading was down more than $20 from high, and ended the week below Wednesday setting. Additionally, despite record Gold prices the stocks were not participating as they should have been.

The confluence of events last week suggests that short-term emotional furor may have been exhausted. Further $Gold weakness is likely as pessimism on U.S. dollar reached a short-term extreme. Momentum players were badly burned in late part of week by failure in the U.S. stock markets and in metals. One message we have attempted to send out is that global financial markets are interconnected in the short-term. These failures in the stock markets will have an impact on the metals. If stock markets act in a negative manner so will the metals. Gold may finally get correction that is inevitable and overdue.

Basic Trend: $Silver: Up Investors should focus on Buy signals. Strategy: Positive, Per Investment Policy of October 2004 Investment Policy: Emphasize Buys

Silver ETF has clearly been a source of buying support for Silver the past two weeks. That positive force is losing its dramatic influence. Silver is not a market in which aggressive buying is appropriate at this time. If you are a Silver investor, just sit on your profits for the present. Buying is not advised.

Recommendations: Hold existing Gold and Silver positions for higher prices, and further profits!

TRADING THOUGHTS is published 45 times per year, and distributed by e-mail. Email subscribers to THE VALUE VIEW GOLD REPORT receive TRADING THOUGHTS as part of a $99 e-mail package subscription to THE VALUE VIEW GOLD REPORT. TRADING THOUGHT is not available by regular mail. To receive TRADING THOUGHTS along with THE VALUE VIEW GOLD REPORT click on a link below or send your check or credit card information to: Schmidt Management Company, PO Box 846, Boca Raton FL 33429. Fax orders can be sent to 215-243-7161. Our phone number to place an order is 561-447-0874. Under no circumstance will subscriptions be cancelled or refunds issued after the receipt of your first issue.

To join in on the Gold Super Cycle to over $1,300, click on this link:

http://home.att.net/~nwschmidt/Order_Gold_EMonthlyTT.html

C$Gold: The CN$ continued this past week as a haven from the woes of the U.S. dollar. Despite that strength of paper versus paper, CN$Gold moved to another cycle high. The picture is the message, and trumps all discussions of national resources and strengths.

If the U.S. dollar is not a long-term bet, how can the CN$ be a long-term bet? The cracks in the foundation of U.S. economy are now fairly obvious, given the global rejection of the U.S. dollar. This is not the time to be planning to hoard CN$s, but rather preparing yourself financially to buy CN$Gold when the next opportunity arises.

CN$Gold Recommendation: CN$ investors should be holding Gold. Accumulate cash for next buy signal. CN$ long-term sell.

EU€Gold: Obviously some are moving their money wealth into Euros Perhaps some of that buying is coming from worried investors in Middle East. Also accepted is that oil will ultimately be priced in Euros. Iran may be first to go this direction. Russia likely to follow with dual pricing. Weakness of U.S.$ is too apparent, and paying costs of exchanging dollars into Euros for purchases makes no sense. That all said, €Gold is stronger than the fiat money. EU€ should add to Gold holdings on next buy signal.

EU€Gold Recommendation: EU€ investors can hold Gold for long-term. EU€ likely to appreciate against US$.

TRADING THOUGHTS is published 45 times per year, and distributed by e-mail. Email subscribers to THE VALUE VIEW GOLD REPORT receive TRADING THOUGHTS as part of a $99 e-mail package subscription to THE VALUE VIEW GOLD REPORT. TRADING THOUGHT is not available by regular mail. To receive TRADING THOUGHTS along with THE VALUE VIEW GOLD REPORT click on link below or send your check or credit card information to: Schmidt Management Company, PO Box 846, Boca Raton FL 33429. Fax orders can be sent to 215-243-7161. Our phone number to place an order is 561-447-0874. Under no circumstance will subscriptions be cancelled or refunds issued after the receipt of your first issue.

For the latest in economic news and evaluation, click on this link:

http://www.gillespieresearch.com

AMEX GOLD MINERS INDEX (GDM) = 1171.58

-23.72 or - 2.0%

Marketwatch.Com & The Wall Street Journal, last week, reported that an ETF had been filed on the GDM. ETF would be managed by Van Eck Associates under the banner of the Market Vector Trust. When the ETF will be approved is unknown. Since it is not an innovation in the structure or design of the product, that approval should be readily received.

GDM is a broad based, 40 stock index created for the Amex. Information on the composition of the index can be obtained by going to Amex.com and entering the symbol GDM. Note that some internet price reporting lags reality by one day. As this is an index covering a wide range of Gold stocks, ETF would be attractive for those desiring exposure to the Gold stocks.

That the GDM put in a top and failed to move higher with $Gold trading around US$630 was not a good sign. Move in Gold to that level was clearly viewed by many traders as some kind of short-term speculative move that was not justified. Was it investors in the Middle East panicking? Answer to that question will no doubt remain hidden. Certainly the rumor, widely circulated by CNBC talking heads, that China was about to buy tremendous amounts of Gold urged some to leap in without thinking. Remain calm this following week. Watch and read the markets' messages. Sit on your money.

Your Eternal Optimist;

Ned W. Schmidt, CFA,CEBS

Click to email me: nwschmidt@earthlink.net

TRADING THOUGHTS is published 45 times per year, and distributed by e-mail. Email subscribers to THE VALUE VIEW GOLD REPORT receive TRADING THOUGHTS as part of a $99 e-mail package subscription to THE VALUE VIEW GOLD REPORT. TRADING THOUGHT is not available by regular mail. To receive TRADING THOUGHTS along with THE VALUE VIEW GOLD REPORT click on link below or send your check or credit card information to: Schmidt Management Company, PO Box 846, Boca Raton FL 33429. Fax orders can be sent to 215-243-7161. Our phone number to place an order is 561-447-0874. Under no circumstance will subscriptions be cancelled or refunds issued after the receipt of your first issue.

-- Posted Sunday, 14 May 2006 | Digg This Article