Wednesday, September 06, 2006

Gold Price Challenged 635 & Couldn't Hold On

Personally, I am not impressed when a market breaks into new high territory, then closes at the low end of the day's range, or lower. Smells too much like a key reversal. Stinks of weakness. So today stocks sank from yesterday's lofty empyrean back to sultry reality. As Al Thomas sneered today in Over My Shoulder, "New highs on light volume. . . A mousetrap." I thought stocks might have a little more juice left in them, but apparently not. (That's two days running I've worked "empyrean" into my commentary. Not bad for an old metaphor-mixer, huh?) Truth to tell, silver and gold performed the same way as stocks today.

Silver Price looks like it has posted a double top around 1325. Yes, silver did close 6 cents higher today, but has dropped in the after market. And yes, it msut follow-through to the downside tomorrow to begin confirming that double top suspicion.

Gold Price challenged 635, and couldn't hold on, closing today at 633.50 Slippery performance, not strong. I'm climbing out on a limb, but that appears weak to me.

Y'all ought always remember that these daily comments have a very short time horizon -- 24 hours. Over the longer term I have no doubt that silver and gold will flourish. If gold does not top $1000 and silver $25 in the next 12 months, I will be much surprised.

Gold/Silver ratio leaves us nothing to say today. US Dollar crept out of its hole at 85 into another at 85.15. What a mouse. Dow in Gold Dollars continues to prove stocks have neither strength nor credibility against gold or silver.
Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.