wmeubank@ocp.kcmo.com
DOHMEN CAPITAL RESEARCH INSTITUTE, INC.
66 Queen Street, Suite 3801, Honolulu, Hawaii
(October, 1997) METALS: I'll make the commentary short and sweet, as the charts show everything. We have new sell signals on silver as well as gold on our trusty MACD indicator. Either the metals establish a bottom right here, which is doubtful, or the next downleg is imminent.
The XAU Index of gold mining companies gives a little bit of hope for the precious metal's golds. Note that in last month's issue, the index was on the verge of a new sell signal. That was confirmed immediately thereafter, and the index declined strongly. Since that time, it has hit the down-trend line from the top in the 92 area. That is natural support.
The MACD indicator is starting to turn up, which gives hope of a crossover and a new short-term buy signal.
CONCLUSION–Although the recent strength in the XAU Index gives hope for a precious metals rally, I recommend staying out of the precious metals section as an investment.
SUMMARY–We now have new short-term sell signals on gold and silver. There's no reason to be invested in this area. If there is a strong move, it should be downward. Otherwise, we'll see a choppy consolidation pattern for a while.
Bert Dohmen
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