Gold Futures Pull Back

The value of the U.S. currency and that of gold tend to move in opposite directions over time. One dollar was recently buying 121.768 yen, up from 121.68 yen late Friday. Euros were being exchanged for $1.2962, down from $1.3006 previously.

Turning to the retail sector, the U.S. Mint says it sold 39,500 ounces of its 22-karat (91.7% pure) gold eagle coins to dealers in January. In the same period, only 14,000 of the Mint's 24-karat (99.99% pure) one-ounce buffalos were purchased.

That's a contrast with the whole of 2006, when the buffalo, which only went on sale at the end of June, outsold the eagle by more than 20% (323,000 buffalos vs. 261,000 ounces of eagles).

Among the miners, at least one observer sees the possibility of a major rise for the Amex Gold Bugs Index. Clive Maund, a Chile-based technical analyst, says the index is currently in a major uptrend, according his analysis.

"If this trend channel is operative," writes Maund in a research report, "then we are close to an optimum buying area with the index still being relatively close to the lower boundary of the uptrend channel."

He sees long-term channel support at around 300 and short-term resistance around 375. The index was recently lower by 1.5% at around 335, dragged down in part by a 3.1% loss in shares of component stock Kinross Gold(KGC Quote).