FSJG Index™ Weekly Review
by Frank Barbera
March 24, 2006

General Comments

Signs of a slow down brewing in the housing market emerged on Friday and helped the Gold market move higher. Traders viewed the weaker housing data as a hopeful sign that the Federal Reserve might begin suggesting an end to the long series of interest rate increases. However, as is perhaps more often the case with short-term market moves, much of the day-to-day movement is difficult ground in broad scale macro-data. For example, this week's inflation report showed a much larger-than-expected increase in the “core” rate of inflation, which is also high on the Fed’s watch list.

Nevertheless, Gold gained nearly $10 on Friday and finished the week with a gain of $5.30 to close at $560.10, up from last week's reading of $554.80. Gold Stocks sprinted forward on Gold’s strong Friday rally with the HUI and XAU both ending the week with solid gains, the XAU at 133.40, up from 131.72 the prior week and the HUI at 313.96, up from 302.02 the prior week.

Financial Sense Junior Gold Index

Not surprisingly, the smaller gold indices also gained ground with the Financial Sense Junior Gold (FSJG) Index ending at 265.93, up from 260.32 the prior week. For the FSJG, the weekly gain totaled 5.61 index points or 2.15%. With a close of 265.93 on 3/24/06, the FSJG Index is now up 69.14 index points from its 12/30/05 reading of 196.79, for a year-to-date percentage gain of 35.13%. Wow! – that’s a one heck of a first quarter return!

On Friday the FS Junior Gold Index ended above the 50-day average at 241.99 and above the 200-day average at 179.66.

Where the Junior Producers are involved, this week's action yielded another round of solid gains with the index closing at 270.64, up from 262.24 the prior week, a gain of 3.20%. At week's end, the FS Junior Producers Index ended above the 50-day average at 253.34, and above the 200-day average at 197.30. The index is still below overhead resistance dating back to the peak seen on 12/01/03 at 277.55.

Among the other sub-indices, the FS Junior Development Index, which has been the overall market leader of the past few months, actually lost ground on the week ending at a reading of 744.61, down from last week's reading of 749.88. The weekly loss of 5.27 index points translated into a minor percentage decline of .007%. From the 12/30/05 close of 574.55, the Development Index is up 170.06 index points YTD, or 29.60% and up an amazing 74% from the October lows of 2005 – just 5 months ago.

The McClellan Summation Index ended the week at 1187.72, down from 1267 the prior week and below its signal line at 1232.00. Overall, while the Junior Gold averages have continued to do well, the nascent downtrend in the Summation Index points to a narrowing advance.

*Please note that the individual companies in this index are proprietary and will not be disclosed due to compliance and regulatory issues resulting from the relationship of FinancialSense.com, Puplava Financial Services, Inc., Registered Investment Advisor and Puplava Securities, Inc. Member Firm FINRA/SIPC.