FSJG Index™ Weekly Review
by Frank Barbera
September 16, 2005

The FS Junior Gold Index turned in an excellent performance this week with the index closing at 164.64 up from last week’s value of 155.56. For the week, the index was up 9.09 index points or 5.8%. While the index still lagged the price gains of the major gold stock indices (XAU +7.63% and HUI +8.73%), the FS Junior Gold Index nevertheless broke out above a long-standing downtrend line connecting the highs of April 7, 2004 (209.84) and March 8, 2005 (165.62). In addition, the index moved solidly back above a now-rising 200-day moving average (155.46) and remained above the 50-day average (152.06). The 50-day moving average is now rising and could cross back above the 200-day average in coming weeks.

Within the three sub-component groups comprising the FS Junior Gold Index, the Junior Producers rose a respectable 6.82% with Junior Development companies gaining 6.67%. Within the index, the area which held back performance and remains quiescent is the Junior Exploration group, which gained only 2.43% for the week.

Investors should understand that during the course of any gold and gold stock rally, money will normally gravitate first to the well-known high cap issues and then to intermediates and juniors. Normally, only late in the move will Junior Exploration companies begin to strongly outperform.

Consequently, the current action appears to be holding in line with historical precedent. This suggests that in coming weeks, if the advance in gold and gold stocks continues, smaller companies should begin to demonstrate better relative strength.

*Please note that the individual companies in this index are proprietary and will not be disclosed due to compliance and regulatory issues resulting from the relationship of FinancialSense.com, Puplava Financial Services, Inc., Registered Investment Advisor and Puplava Securities, Inc. Member Firm FINRA/SIPC.