Saturday, November 18, 2006

Gold and Silver Will Come Roaring Back Off The Dips

Today the metal's reversed roles and gold seemed a tiny bit stronger than silver, closing up a magnificent 90 cents versus dropping 14.3 cents. On the chart gold shows support resistance at 622 and at 622 and 614. A close below 614 would take it lower, probably to 602. Gold needs to close over 626, and then 632 in short order to turn up. Silver has fought off every attempt to break it to 1250, but is tied in below 1280. I felt bleak until I looked at the past 5 days' charts. Both gold and silver might have bottomed this week. If not, the bottom should occur by the end of next week.

Y'all should buy on ANY dips, because silver & gold will come roaring up off these prices and never look back. Watch closely & alertly next week.

GOLD/SILVER RATIO is preparing to drop heavily. I anticipate our next silver to gold swaps will occur below 35:1. We can afford to be patient.

Give the devil his due: stocks are strong. The S&P500, though far from its all-time closing high of 1527 (March, 2000), managed to close above 1,400 today, a psychological milestone. Stocks can keep rolling into the first or second quarter of next year. So why do I continuously advise y'all to swap stocks for silver & gold? Because metals even now are about to pull out of their six month correction and knock on and exceed their last highs at 1500 and 719. Meanwhile you are seeing the last of the last rose of summer on stocks, which remain in a primary bear (down) trend.

Which had you rather hold over the long run? Since 1999 and 2001 stocks have lost 55% against gold and 63% against silver. Which do you want to hold, stocks or silver & gold? Stocks are making a blowoff top that's liable to go anywhere, but 12,500 and 12,750 are nice numbers.

The Dow in Gold Dollars (DiG$), which measures stocks' performance in terms of gold dollars (0.048375 troy ounce), rose today. It appears to have double bottomed below G$400.00 (19.35 oz.) last week. Can it pierce resistance at G$415-17, G$425, & G$433? I don't know. If it does, it will stop around G$475 (22.98), the half way mark of the previous (1980 - 2000) rise to G$922.45 (44.62 oz.)

The US DOLLAR INDEX isn't telling us anything. It is hovering between 85.3 - 85.5, moving point-lets every day & marking out no path. A close below 85 would send it dropping like your car keys out of a bass boat. It must close above 87.3 to break out to the upside.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"

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.