Gold Price -- $621oz.

The long term price uptrend dating back to 1999 remains
intact. The gold price price became hyperextended at the
outset of this year. The price has corrected substantially
since the May cycle peak of $734oz., but the hyperextension
uptrend still appears intact. To get back into the long term
channel, gold now would have to drop a little inside of $560.

The market has held support well at $575 so far in the second
half of 2006, and this has led traders and mavens to regard
the normal November - February period of seasonal strength in
gold as an opportunity to add to positions in the early going
(see chart).

My micro fundamental model still has the equilibrium gold price
at $470. The macroeconomic price model remains in an uptrend
dating back to year end 1998, but has been flat for six months
and continues to suggest a gold price only in the range of
$500 - 520. The indicators show a modest increase in monetary
liquidity, flat sensitive materials prices and a drop in the
oil price. So my reading of the fundamentals do not yet support
a rising gold price short term. At this point the analysis suggests
that if you want to buy gold for the short run, you may have to count
on other seasonal players to join you.

There is a complicated geopolitical tension situation slowly
unfolding in Lebanon as I recently discussed. That might be worth
watching (see note of 11/13).