Friday, January 12, 2007

The Bottom in the Gold and Silver Price is Near - Hours or Days, Not Weeks

Both the SILVER PRICE & GOLD PRICE dropped sharply in the after-market. Well, sharp to me at $1.80 for gold and six cents for silver. However, the gold price has support all the way down to 609. A break of 606 will test 600. If 600 folds, then 590 is a sure thing. Look for a sharp, fast V-bottom. That bottom is near -- hours or days, not weeks.

The silver price closing below 1238 -- just below at 1237.50 -- bothers me. As silver was floating down from its 4 December 1406 high, it stopped and rallied from 1238.2 (18 December), then caught and rallied again from 1235.8 (21 December).

Why did silver fail to close above 1238.2? it was only 0.7 point. Tomorrow ought to see the water- shed. Either silver will (1) climb on past 1250 & confirm an uptrend or (2) collapse and fall back toward a V-bottom around 1200 - 1175. You need wakeful, sharp eyes. This will happen fast and not last long, so you must act quickly to catch it.

But then, I would buy silver and gold at today's prices. You can shoot yourself in the foot and miss buying altogether by trying to get too perfect & spear the very bottom. Remember what happens to pigs.

Odd. Odd. Passing odd. The DOW posted a new high close today (by four measly points), but today's high at 12,544.46 fell below the previous intraday high at 12,580.35 on 3 January. All this has an otherworldly, double top feeling to it, and looks like it on the chart.

The DOW IN GOLD DOLLARS looks the same only moreso. The DiG$ high close (for the move) occurred 5 January at G$423.69 (20.50 oz) while today it closed at G$422.45 (20.44 oz). Looks like a top. Swap stocks for silver & gold.

But look -- I have another hand! On the other hand, if the DiG$ breaks this resistance it will test G$435.90 (21.09 oz) or even G$475 (22.98 oz). If it fails here, it will set this G$425 area in concrete as resistance. Either way, something will break soon, probably tomorrow.

The US DOLLAR INDEX continues in its uptrend targeting 86. The 200 Day Moving average at 85.58 will create trouble and vexation for the buck.

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.