Financial Sense Junior Gold Mining Index Review by Frank Barbera 08/18/2008

General Comments

The U.S Dollar extended its rally for the fifth consecutive week, gaining an addition 1.29 index points or 1.70%, on top of last weeks 3.30% advance. The Dollar Index finished at 77.15, the highest close seen since mid-December 2007. With the Dollar continuing its panic short covering advance, Precious metals continued their powerful five week decline. On the week, spot Gold tumbled $69.85 to close at $785.50, down from $855.35 the prior week in what was the largest weekly decline in a quarter century. For the week, Gold lost 8.16% bringing its total five week decline to a total of $178.20 per ounce or 18.49%. Silver also plunged, tumbling a colossal 17.00% on the week to bring its total five week loss to a total of 32.63%. On the week, spot Silver fell $2.60 per ounce to end at $12.69 in what was one of the four or five worst weekly declines of the last 10 years. Platinum also plunged, losing $185/ounce to end at a reading of $1367.00, down from $1552.00 the prior week. Over the last five weeks, spot Platinum has collapsed by a total of $660/oz or 32.56%.

Senior Mining stocks have also been decimated with the XAU Index losing 7.06 index points or 4.89% on the week, bringing its total five week decline to a reading of –29.50%. The GDX Gold Miners Index also fell 5.76% on the week, with the HUI down 5.58%. So far, the HUI is down 30.54% in five weeks, with the GDX down 29.26%. Junior Miners continue their multi-month bear market with all indices falling to a fresh new lows during the week. For the FSO Junior Mining Index, the week produced a loss of 11.40 index points or 5.98% with the index ending at 179.19, down from 190.59. The 50 day average ended at 214,83, with the 200 day average ending at 250.77.

Financial Sense Junior Gold Index™

Junior Mining Index

Above: FSO Junior Mining Index 40 stocks

Financial Sense Junior Gold Index™

Junior Producer Index

Above: FSO Junior Producer Index

The FSO Junior Producer Index ended down 14.55 index points or 6.33% to close at 214.94, down from 229.50 for a loss of 6.33%. The 50 day average ended at 255.96, with the 200 day average ending at 270.51. Non-Producers actually held their own in the week just past, with the FSO D&E Index, (Development and Exploration) ending at 170.86, down from 180.39, with the index falling 9.53 index points or 5.28%. For the week, the D&E Index ended below the 50 day average at 202.90, and below the 200 day average at 241.40. Development Stocks ended at new lows with the Development Index closing the week at 379.78, down from 392.41, a loss of 12.63 index points or 3.21%. The 50 day average ended at 434.32 with the 200 day average ending at 470.87.

Financial Sense Junior Gold Index™

Junior Development & ExplorationIndex

Above: FSO D&E Index

Financial Sense Junior Gold Index™

Junior Development Index

Above: FSO Junior Development Index

Financial Sense Junior Gold Index™

Junior Exploration Index

Above: FSO Junior Exploration Index

Finally, Exploration stocks also ended at a new low, with the Exploration Index ending at 101.22, down from 109.71, with the week yielding a loss of 8.49 index points or 7.73%. The 50 day average ended at 125.76, with the 200 day average ending at 164.92. Looking at the current situation on a year to day basis, Gold is now down 47.90 or 5.70% from its 12/31/07 close of $833.40, while Silver is down $2.09 from its 12/31/07 close of $14.78. YTD Silver is down 14.14%. Among the mining indices the XAU Is down 20.73% YTD, while the FSO Index is down 34.35%. Within the FSO, the Junior Producers are down 22.35%, with the Development stocks down 18.71%, and the Exploration stocks down 48.16%. The D&E Index is down 35.10% so far in 2008. From the most reason bull market peaks all recorded in early to mid 2007, the FSO Index is now down 46.08% for their entirety of their bear market (thus far), with the Junior Producers down 40.88%, the Development stocks down 52.45% and the Junior Exploration stocks down 57.67%. It has been a difficult 18 months to be sure, with this week’s action showing the Junior Gold’s on a relative strength uptick versus the steep decline in Senior’s. This is asmall hopeful note to end what was otherwise quite a forgettable week.

Financial Sense Junior Gold Index™

Junior Relative Strength Ratio versus Senior’s.

Above: FSO Junior Mining Relative Strength Ratio versus Senior’s.

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.