GOLD

Down and up and sideways, gold was just tracking time and ended the week almost where it started. A lateral trend such as this raises havoc with many technical indicators which are primarily trend followers. However, one must continue stumbling along and try to decipher the activity as best one can.

The long term moving average has gone into a horizontal trend, barely moving up or down, although the price remains consistently below the moving average line. Price momentum is still positive while the volume action is neutral. With the long term point and figure chart still far from going bearish I will remain bullish on the long term.

On the intermediate term nothing is giving me any reason to be bullish. All indicators remain in the negative so I remain bearish on the intermediate term.

The price has been toying with the short term moving average line all week, ending just a hair above the line on Friday. The line is still pointing downward but has already started a turn towards the upside. Short term price momentum is still negative while the volume action is neutral tending more towards the negative. All in all, the short term is still rated as bearish but could change in a moment's notice, it's that close. As for the very aggressive Stochastic Oscillator, it has moved into the positive zone indicating potential for some continued upside action.

U.S. Dollar Index

In keeping with the price of gold, the US$ Index has been moving sideways throughout the week. This has resulted in the long term moving average to just start trending in a positive direction but still could use better upside Index activity. Long term price momentum is still negative and the P&F chart has still not confirmed a reversal of trend. Long term is still bearish but moving towards the bullish.

We have two resistance levels that the Index must break through to continue on its upward trek, a short term one just above the 85 level and an intermediate term one at the 85.5 level. Breaking of these resistances is not a sure thing but so far the indicators are pointing in that direction. For now the action is neutral. A move through that short term resistance or short term support (at 84.3) should tell us the next direction for the Index.

Gold Indices and Stocks

It's been another rough week for the various Gold & Silver Indices. The Merv's Gamb-Gold Index has taken the greatest hit again, as I had warned might happen. It is now down some 14% in the past few weeks while the higher "quality" Merv's Qual-Gold Index is down only 5%. However, looking at it in another way, the Gamb-Gold Index is still up some 60% in the past year while the Qual-Gold Index is only up 14% in the same period. I guess it depends upon whether one wants to sleep at night but make only a nominal profit or if one can take the heat for the big bucks.

The AMEX Gold BUGS Index, the more aggressive of the major North American Gold Indices, is at a very critical juncture. It is sitting right on top of a 3 year old up trend line. It must move up from here. Should it decisively break below that line one could expect it to move back to last year's lows in the 160 to 170 range.

Reading the Info table

The intermediate and long term technical information table provides the latest weighted moving average (MA), price momentum (MOM), relative strength (RS) and an overall technical rating (RATE) of each component. A + or - symbol is provided to indicate if the indicator is gaining strength or losing strength.

Mervyn Burak, CMT
Hudson Aero/Systems Inc.
Technical Information Group

merv.burak@hudsonaero.com

10 April 2005

During the day Merv. practices his engineering profession as a Consulting Aerospace Engineer. Once the sun goes down and night descends upon the earth Merv. dons his other hat as a Chartered Market Technician (CMT) and tries to decipher what's going on in the securities markets. As an underground surveyor in the gold mines of Canada's Northwest Territories in his youth, Merv. has a soft spot for the gold industry and has developed several Gold Indices reflecting different aspects of the industry. As a basically lazy individual Merv's driving focus is to KEEP IT SIMPLE.

Although not normally available to the public, to obtain a copy of the latest weekly technical information on the component stocks of the various Merv's Gold indices, e-mail a request mentioning this Gold-Eagle offer. PLEASE provide at least your full name and home town.