Friday, December 29, 2006

Silver Price to Test $24 and Gold Price To Challenge $900-$1000 by End of May 2007

It now appears that the SILVER PRICE and GOLD PRICE bottomed in the days before Christmas. They have left me somewhat trepidatious about one more leg down, but for now I have to stick with only one interpretation: they are headed up.

In 2007 look for the silver price to rally through 1500 and then test 2400 by end-May. In the same time the gold price will challenge $900, perhaps even $1000. If you have been waiting to buy, stop waiting and buy. Get US 90% silver coin in silver and the cheaper bullion coins in gold (Krugerrands, Austrian 100 coronas, Mex 50 pesos, sovereigns, 20 francs).

Most likely the US Dollar will have a tough time this year. To give you the broad limits of the picture, the Dollar Index at 80 stands upon 35 year support. When it breaks that the central banks will manage its fall all the way to 60, which I believe is the target the US Treasury and Federal Reserve are aiming at ultimately. But before that happens it could rally to 87.30. If the dollar climbs over that, then more trouble awaits at 92. Frankly, I don't expect to see that soon, since it should hit 80.50 before any real rise begins.

Get out of all US Dollar denominated assets, while people will still buy them.

For the week stocks (Dow & S&P500) and gold and silver rose, while the Bernanke-ridden dollar stumbled. Stocks keep playing the same game with investors: one big day with 100 point gains, then three days while it bleeds back the whole gain. The Bear is a sadist, and likes to torment his victims before he mauls them. Stocks may replay this pattern a couple of more times, and might rise as high as 12,640. Be warned, however, that this is a Bull Trap, and those caught in it will wail with woe when it begins to wobble, then whooshes downward in 2007's first quarter. Best to lock in your capital by swapping 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.