Monday, December 11, 2006

Every Decline in Gold and Silver Meets Fresh Buying that Buoys their Prices

This thing isn't really unfolding quite as I expected.

The SILVER & GOLD PRICES aren't unfolding as I expected, or perhaps more accurately, as I might like. I really would prefer that they drop suddenly & hard, which would make the next rally that much stronger. Rather, every decline meets fresh buying that buoys their prices. It begins to appear that the decline will be milder than I expected, but then, we haven't reached any really scary downside numbers yet, the kind of numbers that send investors grabbing for their wastebaskets for a quick puke. That's the sort of decline that really cleans out the market and readies it for the next upmove. I can only caution patience here.

The flabby US DOLLAR INDEX fell 37 basis points to close at 83.18. Long as it remains above 83 I suppose it might continue rising, but down is the line of least resistance. Long term, the buck is a drug on the market and will take you down with it unless you shun it now.

STOCKS are still floating along the ceiling at 12,350. The more times a market challenges resistance (or support), the more likely it is to break through. I expect the stock market in some holiday mood (dare I say "spirits"?) to break that barrier & race upward another 100 - 300 points to create the perfect trap for bulls at the very top. Since the DOW IN GOLD DOLLARS (the Dow's measure against gold)remains below resistance around G$417, let alone challenging any important breakout point, I am confident that silver & gold will continue out-pacing stocks and can confidently recommend you swap stocks for silver & gold.

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.