Friday, February 23, 2007

Is There Still Time to Buy Silver & Gold?

The SILVER & GOLD PRICE performed superbly this week, up 4.5% and 2.1%. Silver outperformed gold this week, a sign the rally is picking up steam.

Is there still time to buy silver & gold? Yes. Both have confirmed breakouts above 667 and 1406. Gold will run for 720 - 760 and silver for 1500, very, very quickly. At those levels they will probably back off for a short correction, then rush ahead for $1,000 & $24.00. Sounds crazy, right? Not nearly as crazy as it sounded when gold was $252 and silver $4.01.

GOLD/SILVER RATIO fell this week, to a new low for the move. This is all in order, but we are waiting for a price below 35 to swap again.

It was a very instructive week.

In STOCKS, the Dow made a new closing high at 12,785.52, but closed the week lower than it began. A break into new high territory with a lower close is called a key reversal, or more accurately, the first half of a key reversal. The other half will be fulfilled if the Dow closes lower again next week. The dow has already broken through its last high, so now it's looking at support arund 12,600 - 12,580.

Breaking that will take it down to 12,360 - 12,2340. The Dow is in the process of topping, I suspect, but with no confirmation of a down trend yet and a recent Dow Theory signal of an uptrend. My advice? Swap stocks for silver & gold just as fast as you can do it.

The true situation, the one behind the veil of nominal dollar prices,can be seen by looking at the DOW IN GOLD DOLLARS. This week it dropped through its 200 day moving average (about G$390 or 18.87 oz) for the first time since last September. I say it marks and confirms the end of the DiG$ rally and beginning of a new fall. The DOW IN SILVER OUNCES dropped 5.1% this week.

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.