Hi Ed!

I think the metals are pricing in another Fed rate cut later this week, and this time around the Cabal cannot count on options expiry week to help them drive it lower.  They can try and strategically trim the excitement in the metal by dumping into the market in small batches, but I do not think they can drive it lower this time.  So watch gold move to new highs every day this week.

Keep in mind that as the extent of the financial crisis gets priced in, more people will want to own gold and that will just put more fuel on the fire.  That is the same fear that is driving the mining juniors like ECU lower.  Money is flowing away from risk and into security.  Junior mining stocks are considered to be risky.

I would have thought a bigtime up move in gold would offset the selling presure in the juniors but we are not getting any interest at all today, and that is across the board in the sector.  I used to consider myself a perma-bull but I have to admit I am fed up to the hilt with all of this.  Investing in the juniors has turned into a war of attrition.  We carry all the risk and the juniors get taken down hard on any pullback in the metals, but there is no follow through on the up days.  So people are gradually giving up, a little at a time.

I know that this too shall pass.  That the reasons we bought into the junior miners in the first place are still valid.  That gold and silver will continue moving higher due to the fundamentals, and ultimately that will encourage a new bull market.  But for now, its a war of attrition and all we can do is just hang in and wait.

cheers!

mike