Dear Friends,

The capping activity of the gold banks has now been adopted by the professional trading public and I am told major trading clients of the gold banks themselves.

During the major gold market of the 70s I would often use brokers common to Middle East interests and the German banks when doing size to jam the market through repetitive resistance levels. This would make it appear as Middle East demand.

It is my sense that the opposite is now true using the gold banks. Assuming that to be so, the capping activity is becoming less formidable while the gold banks are covertly on the other side.

We have rarely seen gold chopping this often within such a tight range wherein it failed to resolve itself through the supposed overhead barrier. I assume it will and in the not too distant future bringing it into its third attempt to top $1000.

For a considerable period my written opinion has been that upon the third try of $1000 it would in fact succeed with a run to $1224 to $1278 being the next act in the ugly drama.

I am wholly convinced that when it is all said and done the honors will go to Alf Fields for having given us the best TA guidance to this community. A review of his final report is certainly in order. I was asked last evening why Alf seeked the quiet life. My answer was that Alf has have given you all you need to know. He has warned against speculating for insurance and clearly said he will not give guidance that can be injurious no matter how accurate. What that means is the trader desiring to maximize returns sells at a price objective and the gold price halts momentarily. Thereafter it simply continues its run upwards.

Both Alf and I feel that this time gold is NOT going to do its first quarter 1980 fall, but rather after a correction trade in a range at quite a high price.

Since we met and going back to 2001, the upcoming time marked by the countdown of 72 days to go is what we have been looking for in the gold price and the international dissolution of confidence in the US dollar.

Rather than being discouraged this weekend that gold is not trading above the $960 level, know that it will and that it will means solidly above $1000.

Regards,
Jim