Financial Sense Junior Gold Mining Index Review by Frank Barbera 07/22/2008

General Comments

A miniscule attempt at a trading bounce on behalf of the US Dollar pressured precious metals prices to the downside, with Gold, Silver and Platinum all moving lower in the week just past. On the week, Gold dipped by $2.20 to close at $957.30, down from $959.50, while Silver eased by 1.59%, declining $.30 per ounce to end at $18.49. For spot Platinum, concerns about slowing global growth strongly impacted Platinum prices with the price ending lower by $141.00 to close at $1886.00, down from $2027.00 the prior week for a loss of 6.95%. With metals prices moving uniformly lower, it was little surprise to see large cap mining stocks under pressure. For the week, the widely watched XAU Index, the Philadelphia Gold and Silver Mining Index ended with a loss of 7.02 index points to close at 3.60%, the index closing at 187.92, down from 194.94 the prior week. For the HUI, the week produced a loss of 3.74% or 17.03 index points with the HUI closing at 437.34 down from 454.37 the prior week.

With senior mining names under pressure, we note that Smaller Cap mining stocks also lost ground, the FSO Junior Gold Index ending at 212.68, down 10.44 index points or 4.67% from the prior weeks close of 223.12. For the FSO Junior Gold Index, the 50 day average ended at 226.91 with the 200 day average at 261.11. While the index is still above medium to long range support in the band between 200 and 210, overall the index is now once again in close proximity to major support and not far from a potential multi-year low.

Financial Sense Junior Gold Index™

Junior Mining Index

Above: FSO Junior Mining Index 40 stocks

Among the sub-indices, the Junior Producer Index also checked in with a nasty week, the Junior Producer Index falling from 271.05 to a close last week of 252.69 for a loss of 18.36 index points or 6.77%. For Junior Producers, the index ended below the 50 day average at 264.55 and below the 200 day average at 276.29. Development and Exploration stage companies also ran into heavy sea’s with the D&E Index falling by 4.08% to close at 201.80, down 8.60 index points from the prior weeks close of 210.40. For the D&E Index the 50 day average ended at 216.37, with the 200 day average at 252.17.

Financial Sense Junior Gold Index™

Junior Producer Index

Above: FSO Junior Producer Index

Financial Sense Junior Gold Index™

GST Development and Exploration Index

Above: GST Development and Exploration Index lowest close since December 28th, 2005.

Financial Sense Junior Gold Index™

Junior Development Index

Above: FSO Junior Development Companies

Financial Sense Junior Gold Index™

Junior Exploration Index

Above: FSO Junior Exploration Index

Continuing with the sub-indices, we observe that the FSO Junior Development Index ended at 433.62, down a whopping 24.53 index points or 5.35% from the prior weeks close of 433.62. For Development stage companies, the 50 day average ended at 459.29, with the 200 day average ending at 482.45. Exploration stocks continue to plumb the depths of multi-month lows, the index now down 39.16% on a year-to-date basis. On the week, Exploration stocks extended their losses finishing at a reading of 124.53, down 3.32 index points or 2.57% from the prior weeks close of 127.82. For the Exploration stocks, a new string of 52 week new lows keeps the index below the declining 50 day average at 135.36, and below the 200 day average at 175.40. The Exploration Index finished this week at levels not seen since early November 2006.

Financial Sense Junior Gold Index™

Relative Strength vs XAU

FSO Junior Gold Index relative strength versus XAU

Above: Relative Strength Ratio vs XAU

Financial Sense Junior Gold Index™

Relative Strength Ratio of Jrs to Physical gold

Above: FSO Junior Gold Index relative strength versus Physical Gold

On the week, the relative strength ratio of the Junior’s relative to senior mining stocks and relative to physical gold continued to plunge making yet another series of new lows as large scale capital seems unwilling to touch what appears to be great value in the ground.

That’s all for now,
Frank

*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.