John Read Believe Quotations

Gold and the other precious metals appear to have found support after the recent sell-off, however, we believe it is too soon to turn bullish on gold specifically.

We do not believe that this correction is over and suspect that gold will now consolidate between recent extremes of $545 and $568, with a break of $575 needed to bring back bullish sentiment.

We believe the strength of the physical market is vitally important for 2006; even though gold is rising on speculative and investment buying, at some point there will be a reversal of this trend and gold will correct.

We believe that gold is attempting to find a range with the recent extremes of $535 and $555 likely to confine the metal for a while.

We believe that investors are likely to interpret this ... as being positive for the gold market as it will raise speculation that China will increase its gold holdings.

We believe that new-year allocations towards commodities will keep platinum and palladium firm in the near term and see platinum at $1,100/oz and palladium at $300/oz over one month, although we suspect that profit taking will set in at some stage and see both metals lower to $1,050/oz and $270/oz in three months.

We believe that all precious metals are trading above fundamentally justified fair value, but the weight of investor, speculator and commodity-index buying has demonstrated that this does not stop metals trading ever-higher.

I do believe that the recent run up in gold has been almost entirely driven by speculative and investment demand as jewelry demand has fallen sharply.