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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"
http://The-Moneychanger.com

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.



Thursday, December 28, 2006

Silver and Gold Prices Appear to Have Posted Double Bottoms on December 18 and 21

Both SILVER and GOLD PRICES appear to have posted double bottoms on December 18 and 21. Sure, they could violate those bottoms (1235.8 for silver and 614 for gold) and go lower, but for now the upward trend rules and I am not looking for lower lows (except over my shoulder, as always). Yesterday silver rose 20 cents (1.6%) while gold rose 3.50 (0.6%), but today silver stood nearly still with a 1.50 cent rise against gold's 6.60 jump.

Where does this leave us? Silver refused to break at the 1250 level, has climbed to resistance/support at 1280, and must clear that hurdle and then 1300. Gold held where I expected (612/613) then touched back to 618. Yesterday it cleared 626, now today gold is nestled just under strong resistance/support at 634.10. I didn't appreciate silver's piddling today, and gold is entering stiff resistance all the way to 650; that's the bad news. The good news is that those double bottoms and smart moves up could mean that bottoms have been posted, but both silver & gold must keep on moving up to confirm the trend. Silver needs to close above 1406 and gold above 650 for solid confirmation. Ahh, then the fun will begin.

If you have been waiting to buy silver and gold, stop waiting and move.

STOCKS hit a new high at 12,510.67 yesterday, which loosed a cacophony of crowing amongst the Wall Street touts. Please bear in mind that I said a number of months ago that y'all should expect to see this before stocks' rally collapsed, and it has not taken silver & gold by surprise, nor rendered stocks a better investment that silver and gold, even though silver & gold have been undergoing a 6 month correction while stocks held a rally.

The truth becomes clear by glancing at the DOW IN GOLD DOLLARS or the DOW IN SILVER OUNCES. The new Dow paper dollar high didn't even reach significant resistance in terms of gold, and was MILES from making a new high. The high came in 8/1999 at G$922.45 (about 45 ounces) versus Wednesday's G$412.34 (19.95 ounces). Not even close. Nor were stocks close to a new high against silver. The all time high came in June 2001 at 2,566 oz. versus Wednesday's 981. Stocks have lost 62% against silver, and there's more to lose where that came from. Wherefore you ought to seek to look at the inward heart, and not the outward show.

The US DOLLAR, which had a chance to mount a rally, failed above 84 and now has locked itself again sideways below 84. Lo, how are the mighty fallen! Not a pretty sight, & despite possible rallies to come, it won't get prettier.


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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Friday, December 22, 2006

Buy Everything if Silver Hits 1210

We may have seen the lows for the SILVER and GOLD PRICE yesterday. If not, expect them to show up next week. I would buy everything I was going to buy if silver hits 1210, and buy both silver and gold at that level. The holiday will not necessarily leave silver & gold sleepy next week, so keep your eyes peeled.


The numbers (so the proverb goes) tell the tale. Don't argue with the tape. The numbers at the end of a week tell a tale, too, but this particular Friday we have to remember a grain of salt, since so many traders pull out of the market for the holiday season.

STOCKS took thumps on the face again today, and closed down 102 points for the week, having now given up all the ground they gained when they broke out over 12,350 resistance. This same back and forth will probably carry into January, perhaps beyond, burning up investor's buying power until it's all gone, then resumes its downward career. Note that the Dow in Gold Dollars dropped from last Friday's close at the top of the resistance range. A subscriber pointed out to me today that the Dow is not as representative as the Wilshire 5000 index, which includes not 30 but nearly 5000 stocks. Good point, so I converted the Wilshire 5000 from paper to silver and gold. Even though the Wilshire (like the Dow) is lately making new highs, its performance against silver & gold is even more dismal than the Dow's. The lesson? Swap stocks for silver and gold. It's the right thing to do.

Watch the GOLD/SILVER RATIO for a jump to 52. If that happens, swap any remaining gold for silver.

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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Thursday, December 21, 2006

SILVER and GOLD PRICES Will See Their Lows Tomorrow or Early Next Week

Today's weaker closes, especially silver's, lead me to expect follow through. My friend BL brought to my attention today the convergence of a 62% correction & the 200 day moving average at 1207 in silver. That sounds like a very good number to me. I believe SILVER and GOLD PRICES will see their lows tomorrow or early next week. Do not postpone buying.

Gold/Silver ratio has almost reached 50:1. the 200 day moving average is about 52, and the ratio often touches back to that 200 DMA. If you want to swap gold for silver, do it at 51.50 or better.

The US DOLLAR (poor thing!) is rallying its strength & taking deep breaths for another run at 84.30. Will it make it? I don't know -- it's pretty wheezy.

STOCKS are showing the effects of the season. Traders like to close out positions before holidays. Thinking about stocks, I'm still looking for a high between 12,650 and 13,000. The Dow is beginning to look very toppy. Next year will be the Year That Broke The Bulls. Don't be one of them: swap stocks now for silver and 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"
http://The-Moneychanger.com

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.



Tuesday, December 19, 2006

Gold Price Fall may have Ended Yesterday

I hold back from saying that GOLD and SILVER PRICES have done all their falling because they have only been falling for three days. Yet the decline has been short & sharp, and the Christmas holiday looms. Silver has dropped below its 50 DMA (12.84) and yesterday bounced off support that runs from 1200 to 1235. If it falls further the 200 DMA stands at 1205 to catch it. Yes, silver recovered somewhat today, but not above significant resistance/support. If you intend to buy silver on this reaction, your time is running out. Tarry not, neither wait forever.

Yesterday may have been the end of gold's fall when it hit that 612 area, which is crowded not only by support but also by the 50 and 200 day moving averages. From today's reaction, there are plenty of enthusiastic buyers at the 200 DMA. Also the bottom rising trend line seems to cross about 610. What I would like to see for both metals is a touch back tomorrow to 610 and 1235, turning around into a higher close. On the other hand, a close below those points would signal lower prices coming.

The GOLD/SILVER RATIO has climbed above the 50 DMA (48.65) but not reached the 200 DMA at 51.38. That last is the maximum point I expect to see. If perchance anyone was waiting to swap gold for silver, better do it now. No more chances.

The US DOLLAR INDEX took a 55 basis point hit today, but now looks as if it has set off on a rally of sorts, with this qualifying as the first correction. It will next have to better 84.40 to maintain an uptrend, so watch for that. A fall below 83 would indicate a change of direction to the downside.

STOCKS are toying with investors, refusing to make any more progress on their breakout over 12,350. I still expect this rally to top out by 12,750 or 13,000 at most. Looking at the DOW IN GOLD DOLLARS we find that yesterday it peaked at that G$417 - 418 (20.22 oz) resistance and then dropped today to G$414.61. Stocks still are failing to perform strongly against gold, leading to the obvious conclusion: 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"
http://The-Moneychanger.com

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.



Friday, December 15, 2006

This is Precisely the Time You Should be Buying Gold at 612 and Silver at 1280 Down.

Take a deep breath, calm yourself, and let's think about markets. Whooo, that's better. Today held enough excitement to suit anybody.

SILVER & GOLD PRICES slipped today, just in time to make good my forecast from last week when I wrote, "I suspect the correction will be very sharp & short, probably by next week and over by Christmas, or, at the latest, mid-January." Silver plunged nearly a dollar today (96.2 cents) and gold fell 11.60. Both metals are now lodged near my first targets for the correction. Next week should see a couple of follow through days which will set all the Gurus (remember, the inflation geniuses above?) to talking about the end of silver and gold. Ignore these nincompoops. This is precisely the time you should be buying gold and silver. Watch this market like a hawk, and jump on gold around 612 (roughly today's price) and silver from 1280 down. The market has handed you an opportunity. Seize it!

STOCKS (measured by the Dow) closed at an all time high today of 12,445.52. For some time I have been warning that new highs were probably, and once the Dow broke 12,350 resistance, it set a target for 12,640. This falls within my long term range of 12,500 to 13,000. I still expect to see stocks begin to drop sharply in January. No new high can seduce me into stocks, because they remain in a long term bear market. Silver and gold will continue to outperform stocks for another 10 years or so, and therefore I would seize this opportunity to swap stocks for silver & gold. Here's the joke for the day: Guru-dom is attributing stocks' rise today to "cooling inflation." My word! How do these people land & keep jobs? Next week it will be "increasing trade with the Planet ZarKon" that they cite as the reason for stocks to rise. Is anybody left on planet Earth with a functioning brain? Beam me up, Scotty!

The DOW IN GOLD DOLLARS turned sharply up today and closed just above the G$417 (20.17 oz) resistance which had so often turned it back in the past. This changes the coloration of the previous trading since the bottom, and opens the possibility that the DiG$ will not stop at its previous high of G$435.90, but still make that fabled halfway mark of its fall from the August 1999 peak, namely, G$475 (22.98 oz). Regardless how high it reaches, it has turned up by (1) trading through the uptrend line it had earlier fallen thru, and (2) closing above its 50 day moving average (DMA).

The flabby US dollar got tired of the Euro kicking sand in its face this week and has been bounding upward 33 basis points a day. I underestimated the buck. Expect this rally to carry to 85 or 85.50, floating on a sea of good feeling as Christmas draws close. Remember, however, that in January the bills will have to be paid, and the buck will tumble again. It's a stinker. Get shut of it.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Silver and Gold Prices are Beginning to Look a Little Tired

SILVER & GOLD PRICES are beginning to look a little tired. We don't have very many trading days left until Christmas, so I expect we will see lower prices between now and then. Expect all markets to go dead around 20 - 21 December as traders pull out for the holiday. Tough timing that, because all you silver & gold investors ought to be watching the market like starving children watching a baker's window. If metals drop, it will be sharp and short, and give you very little chance to buy. Keep your eyes peeled!

A break of 1363 (17 day moving average) in silver would signal lower prices coming immediately.

The GOLD/SILVER RATIO continues to drop, but if metals drop lower, that ratio will make its first upward correction of this move, probably to 48.

Today the Dow Jones Industrial Average broke out to a new high, and is targetting roughly 12,640. This breakout shouldn't have taken y'all by surprise since I've been hinting at it for quite a while, and it shouldn't have filled you with "irrational exuberance," either. This breakout does NOT (repeat, not) change my outlook for stocks. This is a trap for bulls, so don't get caught in it. Rather, you ought to be turning high stock prices to your own advantage by swapping stocks for silver and gold.

The DOW IN GOLD DOLLARS broke down from its uptrend, and now has turned back up, to touchback before dropping lower, I suppose (until contradicted). Both the trendline and the 50 day moving average stand about G$410 (19.83 troy ounces). The DIGS is suggesting here that gold is about to gain value against stocks, but that issue is hanging in the balance, waiting on the next few days' action. Remember & ponder that gold can gain value against stocks" also while stocks are rising, if gold rises faster.

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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



SILVER & GOLD PRICES are Beginning to Look a Little Tired

SILVER & GOLD PRICES are beginning to look a little tired. We don't have very many trading days left until Christmas, so I expect we will see lower prices between now and then. Expect all markets to go dead around 20 - 21 December as traders pull out for the holiday. Tough timing that, because all you silver & gold investors ought to be watching the market like starving children watching a baker's window. If metals drop, it will be sharp and short, and give you very little chance to buy. Keep your eyes peeled!

A break of 1363 (17 day moving average) in silver would signal lower prices coming immediately.

The GOLD/SILVER RATIO continues to drop, but if metals drop lower, that ratio will make its first upward correction of this move, probably to 48.

Today the Dow Jones Industrial Average broke out to a new high, and is targetting roughly 12,640. This breakout shouldn't have taken y'all by surprise since I've been hinting at it for quite a while, and it shouldn't have filled you with "irrational exuberance," either. This breakout does NOT (repeat, not) change my outlook for stocks. This is a trap for bulls, so don't get caught in it. Rather, you ought to be turning high stock prices to your own advantage by swapping stocks for silver and gold.

The DOW IN GOLD DOLLARS broke down from its uptrend, and now has turned back up, to touchback before dropping lower, I suppose (until contradicted). Both the trendline and the 50 day moving average stand about G$410 (19.83 troy ounces). The DIGS is suggesting here that gold is about to gain value against stocks, but that issue is hanging in the balance, waiting on the next few days' action. Remember & ponder that gold can gain value against stocks" also while stocks are rising, if gold rises faster.

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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



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"
http://The-Moneychanger.com

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.



Friday, December 08, 2006

Very Sharp Short Correction for the Gold Price

I judged SILVER & GOLD PRICES wrongly. I thought the breakout had come for gold, (still think it has for silver) but it faltered & stumbled at US$650. How far might this correction take gold? Next week the 625 resistance ought to be breached, then the next strong support lies at 610 - 610. If that doesn't hold, gold could drop as low as 575, the very bottom of the triangle's bottom boundary. I would buy on any retreat to 615, and then more on any dip under 600. I suspect the correction will be very sharp & short, probably next week, and over by Christmas or, at the latest, mid January. Look for both gold and silver to come roaring back
once the correction is complete.

The SILVER PRICE has been so wiry and so strong that I have a hard time judging where a correction might take it. To really scare everybody off the bull, probably a decline to 1185 is necessary. But strong buyers are clustered around 1350. Silver could drop to the last high at 1328, or next support at 1250, or even 1200. I would simply buy at those points on the way down. A close over 1410 indicates, on the other hand, a breakout.

The markets are holding out to you gifts -- seize them!

STOCKS are moving sideways, failing to pierce 12,350. The rally could last well into next year's first quarter, but whether it stops sooner or later, the end will be the same: a long plunge into the bear market. Before then prices may reach 12,500, 12,700, or 13,000, but any of those prices are meaningless to the ultimate outcome.

Swap stocks now for silver & gold, while the market is offering you a great gift.

The US DOLLAR INDEX hit a low at 82.35, then decided to rally. Trust it not, neither rely thereon. It will hit 80.50 or 81 before it hits 85. The dollar is a dog, destined to drop another 25% within the next 12 - 24 months. Oh, yes, the Nice Government Men in the central banks will manage the devaluation so that nobody panics, but lower it's going. (Remember, the NGM are the same folks who brought you Waco, Vietnam, & Iraq!)




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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Thursday, December 07, 2006

Gold Still has More Work to do Downside.

Y'all didn't think you were going to see that today, did you? Gold and silver popped up nicely, refusing to give in.

The GOLD PRICE tested the bottom of support with a low at 624.50, then climbed steadily to close at the top of today's range, 631.90. Strong, but I suspect gold still has more work to do downside. I'm still looking at both the 50 & 200 DMAs around 613 to act as a backstop.

The SILVER PRICE fell to 1346 where it double-bottomed, then bounced madly to close up 24.6 cents on the day at 1386.1. So far that 1350 area has held, but this slide isn't finished yet. The 50 DMA and the bottom Bollinger band are nested at 1247 and 1242, while 1250 is support anyway. Silver ought to make some stand there, and below that is the 200 DMA at 1191.

For the sake of the comeback from this correction and the ensuing rally, I'd prefer silver had been weaker today, but it wasn't. Somebody figured he'd missed a bargain at 1350 and bought today.

'Tis worth noting that the Gold/Silver ratio is still dropping, dropping, and is now down to 45.43. As the correction picks up speed this ratio ought to rise, but so far it hasn't.

On a five day chart stocks have just rolled over to point down. On Tuesday and Wednesday they floated beneath 12,350, made a stab at it today (high 12,360), then just faded. There are several more days of downside coming before another attack on 12,350.


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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Wednesday, December 06, 2006

Gold Could Decline to 612 or Could sink as Low as 575

When you're wrong. I think it's best to go ahead & admit it as soon as possible, and take your licks. I've been wrong. I thought that gold and silver had completed their last plunge down, and I was wrong. That seems to be happening now. Here is the outlook.

The SILVER PRICE could stop anywhere: at the last top (1328), and the gap left on the way up (1305-1310), at strong support at 1250 or 1185. Even lower is possible, 1050. The 200 day moving average stands at 1187, the 50 DMA at 12.38, & those are also candidates to contain the plunge. Either silver will drop very sharply, very fast, bottoming by mid December, or the decline will last into mid to late January. The short, fast outcome is the one I prefer, since it will be followed by a longer, stronger rally, having shaken off all the weak investors. Those left will be the utterly convinced bulls.

GOLD and SILVER PRICES remain out of synchrony, although both have been rising and now both are falling. Their charts show different stages of development, silver having broken out upside and gold still trying to break out of a triangle.

Gold could decline to 612, where the 50 & 200 DMAs both stand right now and where support stands at 610, or it could sink as low as 575. Gold should complete this downward move by mid December or early January, followed by a long, hard rally that should carry about 300 points, to US$900 or higher. (As silver rockets out of this bottom it will crash through 1500 and perhaps challenge 2400 by May.)

I acted too early. The charts fooled me into thinking that the breakout had already begun, but gold's stumbling below 650 (non-confirming silver's rise through 1400) should have warned me, along with the still high discount on US 90% silver bags. If my current interpretation is correct, that premium ought to shrink in the next few days, or at least when we hit a bottom. I'll be looking for it.

The proximate cause of today's fall was a dead-cat rally in the US DOLLAR, which I should also have been watching more closely for, given its long fall and obviously oversold state. Don't expect this dollar rally to last long, or carry beyond 83.50.

STOCKS proved themselves weak again near 12,350, failing today at 12,335 and closing slightly lower on the day. As I said yesterday, stocks will probably make marginal new highs in the next 8 weeks or so, but then will fall hard. Say, by the way -- this drop in silver and gold makes for y'all an even better opportunity to swap stocks for silver & gold!

Today's gold tumble sent the Dow in Gold Dollars up about a half an ounce to close at G$403.59 (19.52 oz), still way below any meaningful resistance.



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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Tuesday, December 05, 2006

Silver Price Needs to Hold 1325 and Gold Price 637.5

SILVER & GOLD PRICES both backed off today. Obviously a lot of people get nosebleeds around 650 gold & 1400 silver, so they conclude it's too high and sell it. Might as well try to hoe out Bermuda grass with a teaspoon, because these metals are rising. This only means that the eventual breakout will be the more fierce for having been held back. All the 650 & 1400 sellers will be exhausted so there will be no opposition to hold them back. The silver price needs to hold above 1325 and gold above 637.50.

The Dow today rose nearly to its all-time high, and is threatening to break through 12,350. If it does, it could easily add another 350 points, but I still don't want to own it. Swap stocks for silver and gold, now, while the market is handing you a soft ball opportunity & before stocks tank, and they will sometime early next year.
Dow in Gold Dollars rose slightly today, but remains in a downtrend. Stocks present no threat to gold there.

US DOLLAR INDEX flat today. I don't see how it can help falling to 80.50, but won't necessarily do that all at a single fall. Will rally slightly, lift head & look around, before sinking again.



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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Monday, December 04, 2006

Once the Gold Price Breaks 650 the Bears will Turn and Flee to their Dens

Both SILVER AND GOLD PRICES survived their touch back to support & have continued to advance. O, but why don't they climb faster? Why hasn't the gold price climbed through 650 yet? What's holding it back? A bull market climbs a wall of worry. Remember that. There are always reasons to doubt the validity of a rallying bull, but he keeps right on rising anyway. Listen, the correction lasted from May to November, and that was long enough. Both silver and gold prices are due and overdue to rally. Once the gold price breaks 650 the bears will turn and flee to their dens. The silver price has crossed 1400 and won't be held back.

You don't stand in the path of a market like this, you get long and then get longer. As long as the silver price holds 1325 and the gold price holds 637, the metals will continue rising. The silver price will hang up trying to pierce 1500 resistance, probably bounce off that spot, then pierce it on the next try. The gold price will mimic that performance at 720, but higher prices are coming for both.

The biggest story since I last commented Tuesday a week ago is the US DOLLAR INDEX's slide into oblivion. On 28 Nov. the buck was at 83.13, and today closed 70 basis points lower at 82.42, well on its way to my 80.50 target for this move. I have bled and pled since the dollar started this slide at 120 for y'all to get out of US dollar denominated assets. The dollar is destined for 60.

Stocks bounced back but are still trapped below 12,350 resistance. It's hard to explain this without sounding like I'm talking out of both sides of my mouth, but you do NOT want to own stocks, even though they may go higher, even 200 - 500 points higher (on the Dow), in the next couple of months. Why? Because they will come down hard, and keep coming down for years. Also, they will lose value against silver and gold for at least another 10 years. Therefore, you still ought to swap stocks for silver & gold.

The DOW IN GOLD DOLLARS (measuring stocks' performance against gold) is dropping lower and lower. Now it is hovering over its 200 DMA, and when it breaks that, look out below.


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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.