The main reason given for the sudden heated interest in gold was a statement that Russia was thinking of increasing its gold holdings from 5% to 10% of the central bank's foreign reserve, and they then confirmed it. Meanwhile, independent of Russia, other commodities soared more than gold, as copper and zinc reached new highs. Oil fell off its top price, but still held at a high 58.47. Platinum set a new all-time high, toying with 1000.

The price for 'stuff' is in a bull market, indicating the decreasing value of paper money itself, no matter what the currency. Inflation is much higher than officially determined by the government, which manipulates the CPI. Most consumers can feel that prices are rising for almost everything, but don't think the feds would cheat. Someday they will be very upset.

The U.S. federal funds rate was raised to 4.0% as the latest trade deficit came in at a new record. Oil ended the month at 58.47.

The U.S. economy continued its appearance of a boom as the third quarter GDP increase came in at 3.4%, but the continuing monthly trade deficits will certainly come home to roost someday in terms of a lower dollar. But not yet. Instead, the dollar index held near 92 as the euro fell most of the month, ending at 1.1718.

The median price for homes sold went up in October, but total house sales decreased. Fixed mortgage rates held near 6.3%, but the unsold inventory of houses is at a nineteen year high. Worldwide stock markets rose as the Dow closed the month at 10,805.

fn       Fund                     1 mo   3 mo  12 mo   2 yr   3 yr
 6 FSAGX Fidelity Select Gold .   14.3   28.7   21.3   12.5   91.5
14 PMPIX Profund Prec Mtls Ultr   11.6   29.6    4.0   -1.7  109.4
16 SGDAX Scudder Gold & Pr Mt A   11.3   18.7    0.5   -7.3  132.6
 7 SGGDX First Eagle Gold A   .   10.9   23.2    8.5   12.7   90.0
21 INIVX Van Eck Intl Inv GoldA   10.9   21.2   10.7    7.8  107.5
20 USAGX USAA Precious Metals .   10.8   19.0   14.2    5.3  125.4
 1 ASA   ASA Ltd              .   10.4   29.8    9.2    5.2   68.1
 8 FKRCX Franklin Gold & PrMt A   10.4   22.1   14.9   14.8  105.7
19 UNWPX US Global World Pr Mns   10.0   15.1   11.5   16.4  189.1
 3 BGEIX Amer Cent Global Gold.   10.0   19.4    5.9    2.8   93.7
 9 GOLDX Gabelli Gold         .   10.0   21.8   10.7    3.7   99.7
 5 EKWBX Evergreen Prec Mtls B.    9.5   20.0   10.0   11.1  127.1
15 RYPMX Rydex Prec Metals    .    9.4   19.1    0.6   -5.2   62.5
17 TGLDX Tocqueville Gold     .    9.3   17.5   10.5    8.6  109.5
11 MIDSX Midas Fund           .    9.2   24.3   17.6   17.6  115.2
 2 FGLDX AIM Gold & Pr Mtls Inv    9.2   16.4   12.4   13.5  103.5
 4 INPMX AXP Precious Metals A.    9.1   16.7    5.2   -6.0   88.8
18 USERX US Global Gold Shares.    8.2   16.1   11.3    6.4  139.4
13 OPGSX Oppenheimer Gold A   .    8.2   15.9    7.5    4.9  103.1
10 LEXMX ING Precious Metals A.    8.2   19.2    9.5    3.3   83.7
12 OCMGX OCM Gold             .    7.8   16.8    3.8   -6.9   79.9
22 VGPMX Vanguard Prec Metals .    7.7   12.5   26.7   39.2  146.5

This was a good month for gold equities and funds, but stocks did not show a reckless charge to the moon mentality. Everyone seemed to know that there could be a correction very easily, and soon, and no one knows how the market will treat a move above 501 by gold. Meanwhile, ASA lost its grip on the front line as other funds made up ground. Fidelity (FSAGX) has come up from the bottom funds in the last three months like it knew where it was going. Conservative Vanguard (VGPMX) couldn't keep up with the fast burners, but was still the year's best.

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 November 30, 2005.

fn          Fund                  pos  10/31/05   11/30/05
22 VGPMX Vanguard Prec Metals .   93.7    20.85    22.46
 6 FSAGX Fidelity Select Gold .   91.6    28.69    32.79
19 UNWPX US Global World Pr Mns   91.3    17.30    19.03
11 MIDSX Midas Fund           .   89.9     2.39     2.61
17 TGLDX Tocqueville Gold     .   88.4    35.52    38.82
 7 SGGDX First Eagle Gold A   .   88.3    17.45    19.36
 8 FKRCX Franklin Gold & PrMt A   86.7    20.81    22.97
10 LEXMX ING Precious Metals A.   86.4     7.34     7.94
21 INIVX Van Eck Intl Inv GoldA   86.1    10.56    11.71
20 USAGX USAA Precious Metals .   85.5    16.93    18.75
13 OPGSX Oppenheimer Gold A   .   85.5    20.25    21.91
 9 GOLDX Gabelli Gold         .   84.1    17.47    19.21
 2 FGLDX AIM Gold & Pr Mtls Inv   84.1     4.02     4.39
18 USERX US Global Gold Shares.   82.6     8.85     9.58
 5 EKWBX Evergreen Prec Mtls B.   82.3    34.48    37.75
15 RYPMX Rydex Prec Metals    .   81.1    38.64    42.26
14 PMPIX Profund Prec Mtls Ultr   80.7    32.38    36.13
12 OCMGX OCM Gold             .   80.5    11.92    12.85
 3 BGEIX Amer Cent Global Gold.   80.5    12.44    13.68
 1 ASA   ASA Ltd              .   70.9    45.61    49.65
 4 INPMX AXP Precious Metals A.   59.6     9.73    10.62
16 SGDAX Scudder Gold & Pr Mt A   54.7    16.97    18.88

After a rest in October, gold stocks came back to push funds to new highs (all but three funds made new highs the last week of November). While Vanguard did not match the monthly gain, it still was the top fund for holding onto those gains.

The following list shows the approximate size of funds as measured in total assets under management. (In $millions as of the end of November) 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 .   1639
 6 FSAGX Fidelity Select Gold .    846
 3 BGEIX Amer Cent Global Gold.    740
 7 SGGDX First Eagle Gold A   .    623
17 TGLDX Tocqueville Gold     .    590
 8 FKRCX Franklin Gold & PrMt A    571
 1 ASA   ASA Ltd              .    475
20 USAGX USAA Precious Metals .    380
19 UNWPX US Global World Pr Mns    323
 9 GOLDX Gabelli Gold         .    307
21 INIVX Van Eck Intl Inv GoldA    292
13 OPGSX Oppenheimer Gold A   .    283
15 RYPMX Rydex Prec Metals    .    152
16 SGDAX Scudder Gold & Pr Mt A    142
 2 FGLDX AIM Gold & Pr Mtls Inv    121
10 LEXMX ING Precious Metals A.     98
12 OCMGX OCM Gold             .     82
14 PMPIX Profund Prec Mtls Ultr     81
18 USERX US Global Gold Shares.     79
 4 INPMX AXP Precious Metals A.     73
11 MIDSX Midas Fund           .     65
 5 EKWBX Evergreen Prec Mtls B.     49

Fund holdings increased due to asset appreciation, and certainly some new cash flowing into the gold market after this summer and fall's assault on the old gold record.

Vanguard Precious Metals (VGPMX) is still the largest by far.

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
14 PMPIX Profund Prec Mtls Ultr  1.49
22 VGPMX Vanguard Prec Metals .  1.23
 6 FSAGX Fidelity Select Gold .  1.16
18 USERX US Global Gold Shares.  1.12
11 MIDSX Midas Fund           .  1.09
19 UNWPX US Global World Pr Mns  1.07
 1 ASA   ASA Ltd              .  1.07
16 SGDAX Scudder Gold & Pr Mt A  1.06
 4 INPMX AXP Precious Metals A.  1.01
21 INIVX Van Eck Intl Inv GoldA  0.99
 9 GOLDX Gabelli Gold         .  0.99
 8 FKRCX Franklin Gold & PrMt A  0.98
20 USAGX USAA Precious Metals .  0.96
10 LEXMX ING Precious Metals A.  0.94
 3 BGEIX Amer Cent Global Gold.  0.93
 5 EKWBX Evergreen Prec Mtls B.  0.93
15 RYPMX Rydex Prec Metals    .  0.92
 2 FGLDX AIM Gold & Pr Mtls Inv  0.87
13 OPGSX Oppenheimer Gold A   .  0.83
12 OCMGX OCM Gold             .  0.78
 7 SGGDX First Eagle Gold A   .  0.73
17 TGLDX Tocqueville Gold     .  0.73

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. Perhaps 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.

November was another great month for gold and gold equities. However, even with gold reaching 500, most gold stocks were not the subject of a wild buying spree.

As the emphasis has turned to buying 'stuff', gold is but one of many measurements. Economically, gold production has been decreasing against an increasing demand. Mining programs have not been funded adequately in the past few years to keep up with today's demand. A resulting mismatch has produced a higher price in the auction for gold and other metals. That mismatch should be around for years unless the price climbs to much higher values.

Newmont president predicted that gold will be above $1000 in the future. I consider that a given. It is just a matter of time. He also is considering an offer for Placer Dome (PDG) if Barrick Gold (ABX) doesn't continue with its offer for PDG. This is the first major example of large mines being forced to find new reserves by buying out smaller mines.

Since it is difficult for you and I to find the right small mines, it is easier to let the mutual fund managers find them, since they claim to be the experts. Gold fund managers tend to be in position for years, and to also have experience in mining, not just finance.

At the end of November, gold is hitting the 500 resistance level and is in an overbought state, but there is a psychological factor here if a new 18 year record is set over 501, so watch out.