The bombings in Spain show that peace anywhere in Europe is truly at risk from terrorist threats. Despite resident U.N. forces trying to keep order, Kosovo and Serbia are at it again. To the east, Uzbekistan experienced bombings from Muslim rebels.

In South America, Venezuela's political turmoil with an upcoming recall vote against President Chavez has reached as far as South Florida. Too much chaos would decrease the flow of petroleum to the U.S., immediately boosting the price of gasoline. All of these flare-ups contributed a little part to the recent ascent in the price of gold.

The price of oil closed March at 34.27 after reaching as high as 38 during the month. With OPEC confirming that it will make production cuts in April, gasoline price increases are sure to have a bigger effect in political discussions and act as a drag on the economy.

Not to be left out, the dollar slid further, especially against the yen, which closed at 103.4 yen/dollar, a four year high for the yen. The euro closed down slightly at 1.2365.

Since early March the price of gold has shown a changed fundamental characteristic. It has begun to advance in several currencies and may be providing a solid signal that gold has bottomed out and is on the way to higher numbers. Previously, gold's climb had been measured mostly in weakening U.S. dollars, but since Japan's decision to no longer support the dollar, the yen has been climbing and the gold price has rallied from the 393 level to close the month at 427.3, approaching a fifteen year high.

Leading the way, silver set another high at 7.93 and the XAU index reached 104.95. The long bond yield closed at 4.77%. The housing market kept a fast pace as mortgage rates leveled off, but the creation of new jobs is still not substantial enough to give this economy staying power. Signs of inflation are beginning to show. All you have to do is check out the parabolic rise in commodity prices worldwide. Gold and silver are just two.

fn       Fund                     1 mo   3 mo  12 mo   2 yr   3 yr
11 MIDSX Midas Fund           .    9.9    1.4   72.9   86.8  194.2
17 USERX US Global Gold Shrs  .    9.7    0.9   87.5  100.7  269.6
18 UNWPX US Global World PrecM.    8.7    5.3  113.4  140.5  319.5
15 SGDAX Scudder Gold & Pr Mts.    8.1   -0.3  111.3  152.4  294.3
20 INIVX Van Eck Intl Inv GoldA    7.1   -1.8   68.2   86.1  247.6
 2 BGEIX Amer Cent Global Gold.    6.9   -2.1   66.0   77.3  241.3
14 RYPMX Rydex Prec Metals    .    6.9   -0.2   65.5   58.9  151.7
19 USAGX USAA Gold            .    6.8   -2.8   86.2  105.4  295.8
16 TGLDX Tocqueville Gold     .    6.7   -1.0   70.3   90.6  267.2
 5 FSAGX Fidelity Select Gold .    6.4   -3.0   49.6   54.7  180.2
 9 LEXMX ING Precious Metals  .    6.3   -2.3   60.9   77.1  200.4
 6 SGGDX First Eagle Gold     .    5.9   -0.2   54.4   91.3  277.1
12 OCMGX Monterey OCM Gold    .    5.9   -2.5   60.0  101.4  265.8
 7 FKRCX Franklin Gold & PrM A.    5.9   -2.1   69.0   61.0  140.5
 8 GOLDX Gabelli Gold         .    5.3   -3.5   63.6   85.7  266.4
 4 EKWBX Evergreen Prec Mtls B.    4.9   -0.4   85.9  105.7  265.4
 3 INPMX AXP Precious Metals A.    4.5    2.3   86.5   93.8  206.2
13 OPGSX Oppenheimer Gold A   .    4.1   -4.9   76.2   66.7  165.6
10 FGLDX INVESCO Gold & Pr Mtl.    4.1   -1.0   65.8   73.7  178.2
21 VGPMX Vanguard Prec Metals .    2.0   -2.6   68.7   63.9  174.6
 1 ASA   ASA Ltd              .    1.6   -4.8   26.5   55.3  183.9

The leading gold fund for March was Midas Fund (MIDSX) as all funds advanced. As a group they are just about to go positive for 2004. However, for the last twelve months, the gain is substantial, with two funds doubling.

The Position indicator gives the relative position of a fund between its 52 week high and low. A high is represented by +100 and a low by -100. As of March 31, 2004.

fn        Fund                    pos     nav
 4 EKWBX Evergreen Prec Mtls B.  100.0   33.75
 6 SGGDX First Eagle Gold     .  100.0   17.37
18 UNWPX US Global World PrecM.  100.0   17.55
11 MIDSX Midas Fund           .   92.6    2.23
 3 INPMX AXP Precious Metals A.   87.6   12.63
16 TGLDX Tocqueville Gold     .   85.3   36.23
14 RYPMX Rydex Prec Metals    .   83.8   44.32
10 FGLDX INVESCO Gold & Pr Mtl.   83.0    3.84
 7 FKRCX Franklin Gold & PrM A.   80.2   19.03
17 USERX US Global Gold Shrs  .   79.8    8.84
21 VGPMX Vanguard Prec Metals .   79.7   15.96
20 INIVX Van Eck Intl Inv GoldA   79.1   11.43
15 SGDAX Scudder Gold & Pr Mts.   78.1   20.84
 2 BGEIX Amer Cent Global Gold.   76.1   12.90
 5 FSAGX Fidelity Select Gold .   72.8   28.95
 9 LEXMX ING Precious Metals  .   72.1    7.58
19 USAGX USAA Gold            .   71.0   16.87
 8 GOLDX Gabelli Gold         .   68.0   17.55
12 OCMGX Monterey OCM Gold    .   66.4   13.45
13 OPGSX Oppenheimer Gold A   .   63.5   19.90
 1 ASA   ASA Ltd              .   62.4   43.30

All are well above their 52 week average. Three funds set a new 52 week high on March 31, considering distributions. This indicator demonstrates a fund's ability to retain previous advances without falling out of bed when gold has a bad month or two. In other words, their investments are more stable.

The following list shows the approximate size of funds as measured in total assets under management in $millions. (As of March 31) This is only an approximation as the size changes daily with new purchases, redemptions, and nav changes. Relative positions of the funds usually don't change much. The largest remain the largest.

fn         Fund               $assets
 5 FSAGX Fidelity Select Gold .   800
 2 BGEIX Amer Cent Global Gold.   703
21 VGPMX Vanguard Prec Metals .   572
16 TGLDX Tocqueville Gold     .   500
 7 FKRCX Franklin Gold & PrM A.   436
 6 SGGDX First Eagle Gold     .   420
 1 ASA   ASA Ltd              .   414
19 USAGX USAA Gold            .   307
20 INIVX Van Eck Intl Inv GoldA   303
18 UNWPX US Global World PrecM.   301
13 OPGSX Oppenheimer Gold A   .   201
 8 GOLDX Gabelli Gold         .   179
15 SGDAX Scudder Gold & Pr Mts.   172
10 FGLDX INVESCO Gold & Pr Mtl.   135
 9 LEXMX ING Precious Metals  .   109
17 USERX US Global Gold Shrs  .    85
14 RYPMX Rydex Prec Metals    .    75
 3 INPMX AXP Precious Metals A.    73
11 MIDSX Midas Fund           .    71
12 OCMGX Monterey OCM Gold    .    50
 4 EKWBX Evergreen Prec Mtls B.    38

These numbers have approximately doubled over the last twelve months. While the navs are increasing and contribute to the increased asset level, it also shows that there are more investment funds coming into precious metal funds from other sources.

The beta indicator measures the relative volatility of a fund's net asset value (nav) movement over the last 52 weeks as compared to the gold fund group average, 1.0. This number indicates volatility but does not specify the direction of movement, so it is only a measurement of relative activity of the price of the fund.

fn        fund                    beta
15 SGDAX Scudder Gold & Pr Mts.   1.65
18 UNWPX US Global World PrecM.   1.43
19 USAGX USAA Gold            .   1.33
17 USERX US Global Gold Shrs  .   1.30
13 OPGSX Oppenheimer Gold A   .   1.22
 3 INPMX AXP Precious Metals A.   1.15
 4 EKWBX Evergreen Prec Mtls B.   1.12
11 MIDSX Midas Fund           .   1.06
16 TGLDX Tocqueville Gold     .   1.04
 2 BGEIX Amer Cent Global Gold.   1.03
 8 GOLDX Gabelli Gold         .   1.03
20 INIVX Van Eck Intl Inv GoldA   1.02
 7 FKRCX Franklin Gold & PrM A.   0.98
14 RYPMX Rydex Prec Metals    .   0.98
21 VGPMX Vanguard Prec Metals .   0.98
10 FGLDX INVESCO Gold & Pr Mtl.   0.97
12 OCMGX Monterey OCM Gold    .   0.97
 9 LEXMX ING Precious Metals  .   0.96
 5 FSAGX Fidelity Select Gold .   0.81
 6 SGGDX First Eagle Gold     .   0.73
 1 ASA   ASA Ltd              .   0.69

The beta for each fund may change as the fund advances and declines, but the general position on the ladder doesn't change much, except as a reference to other funds. As you can see, there is a big difference between management policies of different funds. These numbers have not changed since December's high.

March was a very good month as represented by Midas Fund (MIDSX) and U.S. Global Gold Shares (USERX). As gold rallied from its base around 393, gold stocks and funds joined in. At first, gold stocks were slow to move, but the move by gold to test the previous high in three months ago finally convinced investors that this move might be for real. The rumor that Japan would no longer support the dollar with large scale selling of yen also suggested that the dollar had lost a major friend.

We will see in April if the Japanese have really stopped investing in large amounts of U.S. Treasury bills, or if it was just a rumor. Watch the long bond yield. It closed the month at 4.77%. In the past, gold rallied on days the yield went down, as Treasuries were bought by someone. If Treasuries are not supported by other banks the yield will go up as their value goes down. Concurrently with a higher yield, if the dollar goes down and gold up as expected, then we are seeing a change in the previous market characteristics. Otherwise known as a paradigm shift.

Optimistic reports that the economy is doing well are counterbalanced by the lack of new high paying jobs and the current housing bubble caused by very low mortgage rates. Those low rates are caused by Federal Reserve policy and the market will interrupt the party soon unless this economy gets going.

The long term prediction by most analysts is still a bull market in precious metals, and with silver's continuing advancement to new highs, we may be on the leading edge of an historic advance.