In the first quarter, the domestic economy did well with the GDP gaining 4.8% and the Dow advancing 6% to 11,367. Oil gained 8% but natural gas fell 22%. Gold gained over 14% in the quarter as all metals demonstrated a bull market surge before April's gains.

A trade deficit for February was slightly less than the record, but included only 28 days. Treasuries are having problems as the long bond yield climbed from 4.89% to 5.16% and the dollar fell to 86.11, below the latest support zones. By breaking below recent support, the dollar could finally be on the slippery slope. With the dollar sliding, more investors are thinking about international stocks and are using international mutual funds. In fact, more U.S. investor money is going into international funds than domestic funds.

China's economy grew over 10% in the first quarter as demand for commodities continued at a high rate, pushing prices higher for just about everything.

The political and potentially military situation in Iran has joined with Iraq to create market worries, pushing oil prices and, as a result, gasoline prices, higher.

According to the Conference Board, an economic researcher, consumer confidence is at a four year high. This explains why many companies near financial bankruptcy have no difficulty selling new debt, and why the S&P price/earning ratio is near 40. The NASDAQ Financial Index, the NYSE Financial Index and the AMEX Securities Broker/Dealer Index are all up big for 2006, representing that speculation is approaching excessiveness. Usually when financials are up, gold is down.

The military and political situation in Iraq is not making much improvement, and the dialogue between Iran and the U.N. has reached a stalemate. Iran is intent on defying most of the rest of the world, and this creates tension in the political arena and in the markets for oil and gold.

Fidelity Select Gold(FSAGX) made a distribution this month of $4.06 (11%) which distorts their reported results.

fn            Fund                1 mo   3 mo  12 mo   2 yr   3 yr
14 PMPIX Profund Prec Mtls Ultr   18.4    1.4  135.8  135.5  212.5
 3 BGEIX Amer Cent Global Gold.   15.2   14.1  110.1  114.3  177.4
11 MIDSX Midas Fund           .   15.1   24.0  138.5  153.8  241.7
18 USERX US Global Gold Shares.   15.0   24.6  148.5  148.9  275.2
12 OCMGX OCM Gold             .   14.3   16.8  108.1  103.8  155.7
 9 GOLDX Gabelli Gold         .   14.0   14.5  110.0  112.5  171.3
21 INIVX Van Eck Intl Inv GoldA   12.8   19.8  110.1  118.7  184.5
13 OPGSX Oppenheimer Gold A   .   12.7   16.5  109.5  133.0  213.6
 5 EKWBX Evergreen Prec Mtls B.   12.7   13.9  111.1  119.9  217.4
20 USAGX USAA Precious Metals .   12.5   19.3  120.7  122.5  226.0
19 UNWPX US Global World Pr Mns   12.2   25.0  134.1  147.5  324.1
16 SGDAX Scudder Gold & Pr Mt A   12.2   11.1   93.0   83.3  202.4
17 TGLDX Tocqueville Gold     .   11.6   15.6   99.9  112.3  190.7
 7 SGGDX First Eagle Gold A   .   11.5    9.6   79.7   89.4  132.8
 8 FKRCX Franklin Gold & PrMt A   11.3   10.8  109.4  124.2  199.0
 4 INPMX Riversource Prec MtlsA   11.3   14.9  102.8   92.8  172.2
 2 FGLDX AIM Gold & Pr Mtls Inv   11.2   12.2   96.9  108.1  179.0
10 LEXMX ING Precious Metals A.   11.1   14.9  111.4  110.1  164.5
15 RYPMX Rydex Prec Metals    .   10.8    8.6   93.1   81.8  129.2
22 VGPMX Vanguard Prec Metals .    9.8   13.2   94.0  154.6  240.5
 6 FSAGX Fidelity Select Gold .    9.4   10.7  108.8  118.8  149.1
 1 ASA   ASA Ltd              .    7.0    1.3  103.4  107.5   99.9

Profunds (PMPIX) jumped to the front of the list with others just a step behind, but two months in a row of excellent gains should tell you to be alert for a correction or at least a step backward to regroup. The movement of gold and silver to near magical advances cannot be sustained forever.

The Position indicator gives the relative position of a fund between its 52 week high and low. A high is represented by +100 and its low by -100. Positions and prices as of April 28, 2006.

					      nav
fn          Fund                  pos  03/31/06  04/28/06
18 USERX US Global Gold Shares.  100.0   12.63    16.61
11 MIDSX Midas Fund           .  100.0    3.42     4.34
19 UNWPX US Global World Pr Mns  100.0   24.50    31.42
20 USAGX USAA Precious Metals .  100.0   23.44    29.35
 3 BGEIX Amer Cent Global Gold.  100.0   16.80    21.18
 5 EKWBX Evergreen Prec Mtls B.  100.0   46.76    58.04
21 INIVX Van Eck Intl Inv GoldA  100.0   14.02    17.73
12 OCMGX OCM Gold             .  100.0   16.31    20.42
 8 FKRCX Franklin Gold & PrMt A  100.0   27.78    33.78
17 TGLDX Tocqueville Gold     .  100.0   46.85    56.26
16 SGDAX Scudder Gold & Pr Mt A  100.0   20.93    25.75
13 OPGSX Oppenheimer Gold A   .   99.6   25.98    32.76
 1 ASA   ASA Ltd              .   99.4   61.39    69.53
 9 GOLDX Gabelli Gold         .   99.2   22.61    28.61
 4 INPMX Riversource Prec MtlsA   98.9   13.38    16.39
10 LEXMX ING Precious Metals A.   98.5    9.95    12.15
 7 SGGDX First Eagle Gold A   .   98.1   21.91    26.00
22 VGPMX Vanguard Prec Metals .   97.3   25.88    30.65
 2 FGLDX AIM Gold & Pr Mtls Inv   95.3    5.23     6.34
15 RYPMX Rydex Prec Metals    .   93.8   49.81    60.39
14 PMPIX Profund Prec Mtls Ultr   93.3   42.88    54.50
 6 FSAGX Fidelity Select Gold .   79.8   35.91    38.61

Eleven funds hit a new high on the 28th, but all others had reached a high the previous week or were very close. This is a stock stampede, so invest cautiously. Some stocks and funds moved over 5% in one day last month, both up and down.

The following list shows the approximate size of funds as measured in total assets under management. (In $millions as of the end of April) 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
22 VGPMX Vanguard Prec Metals .   3821
 6 FSAGX Fidelity Select Gold .   1416
 3 BGEIX Amer Cent Global Gold.   1112
17 TGLDX Tocqueville Gold     .    936
 7 SGGDX First Eagle Gold A   .    932
 8 FKRCX Franklin Gold & PrMt A    888
19 UNWPX US Global World Pr Mns    770
 1 ASA   ASA Ltd              .    672
20 USAGX USAA Precious Metals .    600
13 OPGSX Oppenheimer Gold A   .    576
 9 GOLDX Gabelli Gold         .    464
21 INIVX Van Eck Intl Inv GoldA    380
15 RYPMX Rydex Prec Metals    .    229
16 SGDAX Scudder Gold & Pr Mt A    208
18 USERX US Global Gold Shares.    173
 2 FGLDX AIM Gold & Pr Mtls Inv    165
10 LEXMX ING Precious Metals A.    144
14 PMPIX Profund Prec Mtls Ultr    132
11 MIDSX Midas Fund           .    123
12 OCMGX OCM Gold             .    121
 4 INPMX Riversource Prec MtlsA     96
 5 EKWBX Evergreen Prec Mtls B.     77

Vanguard (VGPMX) continues to be the leader here with Fidelity (FSAGX) and American Century (BGEIX) chasing. The total amount in these funds is gaining monthly. Not only is the capitalization increase due to higher asset values, but to new money flowing into gold funds. The new total for these is over $13 billion from $11 billion last month.

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 by measuring the difference between a fund's high and low navs, 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
14 PMPIX Profund Prec Mtls Ultr   1.41
18 USERX US Global Gold Shares.   1.40
11 MIDSX Midas Fund           .   1.35
19 UNWPX US Global World Pr Mns   1.17
20 USAGX USAA Precious Metals .   1.11
10 LEXMX ING Precious Metals A.   1.07
 3 BGEIX Amer Cent Global Gold.   1.05
 5 EKWBX Evergreen Prec Mtls B.   1.04
22 VGPMX Vanguard Prec Metals .   1.04
21 INIVX Van Eck Intl Inv GoldA   1.04
 9 GOLDX Gabelli Gold         .   1.01
12 OCMGX OCM Gold             .   1.00
 8 FKRCX Franklin Gold & PrMt A   0.99
 4 INPMX Riversource Prec MtlsA   0.98
13 OPGSX Oppenheimer Gold A   .   0.93
15 RYPMX Rydex Prec Metals    .   0.92
 2 FGLDX AIM Gold & Pr Mtls Inv   0.91
 1 ASA   ASA Ltd              .   0.89
 6 FSAGX Fidelity Select Gold .   0.83
17 TGLDX Tocqueville Gold     .   0.82
16 SGDAX Scudder Gold & Pr Mt A   0.80
 7 SGGDX First Eagle Gold A   .   0.75

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. The greatest difference is the policy of Profund (PMPIX) to leverage purchases or go 100% cash when they want. This policy produces a higher volatility rating and more amplified returns in an up market.

Three months of excellent gains is too much to expect, and the realist in me says to watch out for Mother Nature in the gold market. Even with international demand skyrocketing for all metals and commodities, this move can be corrupted by large scale hedge funds and institutions who will turn the market when they decide enough is enough. Unless you can read their minds, be ready for an overnight reversal. That will provide a good buying opportunity.

Until then, ride the trend. Some gold stocks have doubled since the move really got started in May. They could still go higher. Silver stocks have been riding the expected demand for silver created by the new silver ETF, now on the market. ETFs by definition must buy and sell in the market, so if the tide turns, they will be pushing with the tide and will magnify the direction of flow. In other words, they will increase the volatility, just what the professionals want at the expense of the small investor.

Fundamentally, the trade deficit is still huge, interest rates are still going up, the economy is still being supported by a ballooning currency creation on an international scale, and there is still a big demand for commodities from Asia. In addition, the dollar may be falling off the last ledge.

Even so, gold's surge has become historical, is exceedingly overbought, and a correction is highly probable in the near future. The same can be said for oil, which has been pushed up for many legitimate long term reasons. News of the international situation seems to promote fear of an oil shortage, but the U.S. inventory of oil is high, not low. Several independent analysts and traders are starting to play the short end with puts for both metals and oil. The price of oil could reverse very easily in the near future. A reversal in oil would probably cause a reversal in silver and gold.

Gasoline price jumps are beginning to put pressure on politicians to take action. President Bush decided to ease environmental restrictions on gasoline production and to investigate possible price gouging. While oil price increases were aided by real and potential supply difficulties in Nigeria and Venezuela, U.S. inventories are adequate. Refinery capacity has turned out to be the limiting factor for gasoline supplies and will probably remain so since no new U.S. refinery capacity has been created for 30 years.