FSJG Index™ Weekly Review
by Frank Barbera
August 7, 2006

Financial Sense Junior Gold Index

It was a solid week for the Metals arena, as ongoing war in the Middle East kept the geopolitical uncertainty premium inflated within the Gold market. On the week, the yellow metal gained $23.50 to close at $656.70, up from last weeks close of $633.20 for a gain of 3.71%. The threat of more violence and possibly escalating violence in the Middle East helped bullion out perform all of the mining indices, wherein the XAU gained 2.38% with the HUI up 2.24%. For the week, the XAU gained 3.37 index points to close at 144.91, up from last weeks close of 141.54, while the HUI ended at 337.51, up from last weeks value of 330.10. Within the realm of smaller cap mining companies, higher bullion prices turned up the heat with the FSO Index surging 9.95 index points to close at 260.54, up 3.97% from last weeks close of 250.59. At weeks end, the index finished above the 50 day average at 242.70 and the 200 day average at 229.13. 

For the FSO Junior Mining Index, this weeks close was the highest seen since May 12^th, and leaves the index with a healthy year-to-date gain of 32.39%, well ahead of the XAU (13.19%) and the HUI (+21.88%). Turning to the Sub-Indices, we find that for the week, the Junior Producer Index ended at 282.83, up 2.07 index points from last weeks close of 280.76, a gain of .007%. At weeks end, the Junior Producer Index ended above the 50 day average at 270.88 and the 200 day average at 250.29. The star of the week was the FSO Junior Development Index which vaulted 39.21 index points to close at 696.79, up from last weeks close of 657.58. A gain of 5.96% on the week, the Junior Development Index closed at the highest levels since mid-May and is now up 21.27% for the year.

In addition to strong gains in the Development Index, the Exploration sector was also red hot with the FSO Junior Exploration Index gaining 8.57 index points to close at 127.99, up 7.17% from last weeks close of 119.42. At weeks end, the Exploration Index finished above the 50 day average at 117.10 and the 200 day average at 106.60. 

Finally, it is worth noting that over the last two to three weeks, we have once again begun to see the small cap mining sector outperform their larger cap brethren, even with the larger cap gold stocks also doing fairly well. On a relative strength basis, Small Cap gold’s have been improving even with a trend that is still holding above a rising 200 day moving average. In this context, the mining sector is once again looking healthy on a technical basis.

*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.