The stock market also experienced a roller coaster month as the Dow dropped enough to trigger a major sell signal. Within days, the Dow jumped over 500 points, closing the month at 13,367.

The U.S. housing problem didn't show any signs of improvement as sales plunged and foreclosures increased. Fannie Mae and Freddie Mac experienced losses due to weakening mortgage values in their portfolios, which is putting a big squeeze on available funds for new mortgages. In October, housing permits fell to a 14 year low and existing inventories reached a 22 year record.

The long bond yield plunged from 4.75% to 4.28% before closing at 4.40%. Since this is a major input in calculating mortgage rates, the Federal Reserve has indirectly hinted that they are considering another rate cut in December. The market took notice and rallied, even with a sell signal. Another rate cut will weaken the dollar and strengthen the case for gold and most commodities. Oil ended the month down from a recent $99. Investor confidence continued to go down.

On the international market, central banks are getting worried about the declining dollar and Washington's seemingly lack of action on the problem. Naturally, as the euro approaches $1.50, the European Economic Community gets a little more worried, and may take unilateral action to protect their exports.

If OPEC changes their pricing of petroleum sales in euros instead of the decades long practice of pricing in dollars, the dollar could take another tumble to new lows below 74. That would push the euro to new highs and create a political storm in Europe which would require tough action by someone.

Citigroup raised capital for its cash short problems by selling part of its ownership to Abu Dhabi.

BHP Billiton is trying to buyout Rio Tinto, a major mining company, which also mines gold and silver. BHP is the major supplier to China of basic materials.

fn            Fund                1 mo   3 mo  12 mo   2 yr   3 yr
24 GLD   StrtTrks Gold Shrs ETF   -1.7   16.2   20.1   57.5   71.4
25 SLV   iShrs Silver Trust ETF   -3.2   15.9   -0.5           
 7 SGGDX First Eagle Gold A   .   -5.9   25.2   20.9   60.5   76.2
 1 ASA   ASA Ltd              .   -6.3   25.5   19.1   57.2   78.9
26 HUI   Amex Gold Bugs Index .   -6.6   24.1   14.3   66.9   71.4
22 VGPMX Vanguard Prec Metals .   -7.4   16.0   29.9   85.8  147.1
 2 FGLDX AIM Gold & Pr Mtls Inv   -7.9   22.2   18.2   73.4   94.8
23 GDX   Mkt V Gold Miners ETF.   -8.4   23.1   10.4          
 6 FSAGX Fidelity Select Gold .   -8.7   27.5   21.4   69.8  109.2
 8 FKRCX Franklin Gold & PrMt A   -8.9   25.4   23.1   85.4  118.7
27 XAU   Phlx Gold/Silver Index   -9.1   21.5   14.6   49.3   60.3
16 RYPMX Rydex Prec Metals    .   -9.5   19.9   13.1   58.0   60.0
 5 EKWBX Evergreen Prec Mtls B.   -9.6   25.2   17.3   85.5  106.3
12 OCMGX OCM Gold             .   -9.6   23.4   15.3   83.4   91.2
18 USERX US Global Gold Shares.   -9.7   27.1    8.9   92.9  114.8
 3 BGEIX Amer Cent Global Gold.   -9.8   25.1    9.1   62.9   72.5
 4 SGDAX DWS Gold & Prec Mtls A  -10.4   25.1   17.3   72.2   75.0
20 USAGX USAA Precious Metals .  -10.5   23.6   21.0  101.5  131.8
 9 GOLDX GAMCO Gold AAA       .  -10.6   25.4   19.4   78.8   99.8
21 INIVX Van Eck Intl Inv GoldA  -11.4   25.0   20.1   88.5  109.2
17 TGLDX Tocqueville Gold     .  -11.4   16.9   10.2   70.3   89.0
13 OPGSX Oppenheimer Gold A   .  -11.6   21.8   27.0  107.5  134.1
11 MIDSX Midas Fund           .  -12.4   26.9   25.2  113.0  150.5
19 UNWPX US Global World Pr Mns  -13.6   22.7   13.7   99.7  122.8
15 INPMX Riversource Prec MtlsA  -13.8   12.3    7.4   68.5   77.3
14 PMPIX Profund Prec Mtls Ultr  -14.7   30.0   17.2   51.4   57.4

Although November was a lousy month for gold funds, all are still well above their 52 week averages with significant gains over the past three months. This correction will end with excellent buying opportunities for every fund and ETF. All you have to do is predict how far they will slide before they resume the upward march.

Although this seems a bit too optimistic about the gold markets and gold funds, the fundamentals remain in favor of inflation and debased currencies, and this applies to all currencies that expand their money supplies at 13%.

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 the end of November:

				           nav
fn          Fund                  pos   10/31/07 11/30/07
24 GLD   StrtTrks Gold Shrs ETF   86.4    78.62    77.32
 7 SGGDX First Eagle Gold A   .   72.7    27.28    25.66
22 VGPMX Vanguard Prec Metals .   63.7    39.66    36.71
26 HUI   Amex Gold Bugs Index .   61.6   435.08   406.21
 4 SGDAX DWS Gold & Prec Mtls A   59.1    28.08    25.16
 6 FSAGX Fidelity Select Gold .   56.8    47.58    43.43
25 SLV   iShrs Silver Trust ETF   56.8   143.60   139.00
 8 FKRCX Franklin Gold & PrMt A   55.3    44.05    40.11
12 OCMGX OCM Gold             .   52.6    23.77    21.49
23 GDX   Mkt V Gold Miners ETF.   52.5    50.60    46.36
 2 FGLDX AIM Gold & Pr Mtls Inv   52.4     8.08     7.44
 1 ASA   ASA Ltd              .   52.2    80.30    73.25
 9 GOLDX GAMCO Gold AAA       .   51.7    34.61    30.93
13 OPGSX Oppenheimer Gold A   .   51.6    42.40    37.48
 5 EKWBX Evergreen Prec Mtls B.   51.2    73.40    66.38
20 USAGX USAA Precious Metals .   50.7    38.37    34.36
21 INIVX Van Eck Intl Inv GoldA   50.0    22.20    19.68
27 XAU   Phlx Gold/Silver Index   49.7   188.10   171.07
 3 BGEIX Amer Cent Global Gold.   43.8    24.71    22.28
18 USERX US Global Gold Shares.   42.7    20.25    18.28
17 TGLDX Tocqueville Gold     .   41.2    64.39    57.05
16 RYPMX Rydex Prec Metals    .   40.0    73.75    66.75
14 PMPIX Profund Prec Mtls Ultr   39.3    60.72    51.80
19 UNWPX US Global World Pr Mns   38.3    37.03    31.98
11 MIDSX Midas Fund           .   34.7     6.35     5.56
15 INPMX Riversource Prec MtlsA   33.1    18.22    15.71

Many funds hit another high in early November and then turned south. Since then they have been down and up, mostly down, as the dollar managed a rally back above 76. However, with the Federal Reserve hinting that it might lower rates again in December, the dollar will not be able to rally much more and therefore the gold climbout will resume. As you can see from this table, all funds are well above their 52 week average, or a Position of 0.0.

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 .   4089
 6 FSAGX Fidelity Select Gold .   1716
 3 BGEIX Amer Cent Global Gold.   1170
 8 FKRCX Franklin Gold & PrMt A   1145
19 UNWPX US Global World Pr Mns   1030
17 TGLDX Tocqueville Gold     .    924
 7 SGGDX First Eagle Gold A   .    844
13 OPGSX Oppenheimer Gold A   .    788
20 USAGX USAA Precious Metals .    781
 1 ASA   ASA Ltd              .    736
21 INIVX Van Eck Intl Inv GoldA    502
 9 GOLDX GAMCO Gold AAA       .    473
23 GDX   Mkt V Gold Miners ETF.    399
18 USERX US Global Gold Shares.    270
16 RYPMX Rydex Prec Metals    .    232
14 PMPIX Profund Prec Mtls Ultr    217
 4 SGDAX DWS Gold & Prec Mtls A    206
 2 FGLDX AIM Gold & Pr Mtls Inv    181
11 MIDSX Midas Fund           .    173
12 OCMGX OCM Gold             .    125
15 INPMX Riversource Prec MtlsA     92
 5 EKWBX Evergreen Prec Mtls B.     90

For investment results, size doesn't seem to make much difference.

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    1.52
11 MIDSX Midas Fund           .    1.16
13 OPGSX Oppenheimer Gold A   .    1.13
 9 GOLDX GAMCO Gold AAA       .    1.09
21 INIVX Van Eck Intl Inv GoldA    1.09
27 XAU   Phlx Gold/Silver Index    1.06
 8 FKRCX Franklin Gold & PrMt A    1.06
20 USAGX USAA Precious Metals .    1.05
 4 SGDAX DWS Gold & Prec Mtls A    1.05
 5 EKWBX Evergreen Prec Mtls B.    1.03
23 GDX   Mkt V Gold Miners ETF.    1.03
 3 BGEIX Amer Cent Global Gold.    1.02
19 UNWPX US Global World Pr Mns    1.00
26 HUI   Amex Gold Bugs Index .    1.00
 6 FSAGX Fidelity Select Gold .    0.99
22 VGPMX Vanguard Prec Metals .    0.97
18 USERX US Global Gold Shares.    0.97
 1 ASA   ASA Ltd              .    0.94
12 OCMGX OCM Gold             .    0.94
16 RYPMX Rydex Prec Metals    .    0.87
 2 FGLDX AIM Gold & Pr Mtls Inv    0.87
17 TGLDX Tocqueville Gold     .    0.86
15 INPMX Riversource Prec MtlsA    0.83
 7 SGGDX First Eagle Gold A   .    0.79
25 SLV   iShrs Silver Trust ETF    0.63
24 GLD   StrtTrks Gold Shrs ETF    0.60

The beta for each fund may change as the fund advances and declines, but the general position on the list doesn't change much, except as a reference to other funds. As you can see, there is a big difference between portfolio management policies of different funds. For this month, the betas are unchanged.

November saw the stock market and gold funds display violent swings, carrying gold and silver in both directions. Gold funds bounced from high to low, finally settling down in a three week correction. Still, all funds are well up since August, and gold almost held on to be the first month ever to end above 800. XAU soared to over 189, but couldn't hold it and all funds came down hard. SLV and GLD were the highest ranking on the comparison list but that is because they don't use leverage like funds.

The correction was not unexpected and the recent advances almost begged for a correction in gold and gold equities. Now that we have one, how low will it go? Fundamentals haven't changed in two months. The economy is still on the edge and the Federal Reserve is pumping money into the system in huge chunks to prevent a recession. This adds more fuel to the belief that the dollar is still in trouble. This latest move is not a trend change for the dollar. It is still going down.

The difference of opinions on the direction of the stock market is huge. Several think we are well on our way to a glorious economic future while some think we are doomed as the dollar drops to worthless paper. I'm sure the future is somewhere in between. However, each day seems to provide news that one side is right, and the Dow Industrial responds with a 150 to 200 point rise or fall, dragging gold stocks with it. The result of this action in November saw a noticeable increase in the number of economists who think we are heading for a recession.

Unnoticed by most investors, large funds of investment capital concentrated in national accounts are beginning to influence natural resource markets. These funds, known as sovereign wealth funds (SWF) will be able to put huge amounts of money into play, primarily into natural resources, to support national needs. It is one way in which a nation with a central bank full of dollars can move them out and buy something of value. One example is the investment in Citigroup by Abu Dhabi, which returns dollars into the market and purchases part of American equity. This is good and bad. Take your pick. Recycling dollars increases the supply and decreases value. If foreign bankers buy something, dollars are no longer locked up in the vault and back on the market. So, as central banks spend, gold should go up. Eventually.