Gold Dec & Year Close

Performance

Gold ($/ounce) : 838 +31% p.a. (639)
Silver ($/ounce) Yr : 14.77 +18% p.a. (12.52)
Silver Fund (Dec) : +31%
FTSE 100 Year End : 6457 +3.8% p.a. (6220)
FTSE 100 Fund (Dec) : +92%

WOW ! Any year where an underlying market rises in excess of 30% is truly exceptional. The majority of the gains came in the latter part of the year, when the turmoil hit the equity markets. This is a departure from recent times when all markets have risen and fallen in sync. It is the first serious decoupling and demonstrates a move to safety by the 'clever' money, who appreciate that a 4 1/2 year equity disco has just put on the last slow dance and called last orders.

We suspect that there could be trouble for the equity market in the first part of the new year, 'chucking out' out time at the disco may cause a few scuffles before eveyone realises that there is an after hours party in full swing just down the road in 'Gold Street'.

It would not be unreasonable then for a mini double-top in the gold price at 850, with a pull back to the 760 - 780 level. However a blast through the 850 level means the party goers have arrived armed with the duty free !