Tuesday, February 13, 2007

The Rally in Gold and Silver is On!

The GOLD PRICE knocked at the 667 gate again today, but couldn't quite break through. Remember that the more times it hits that level, the greater the likelihood it will break through.

The SILVER PRICE left gold in the dust today, jumping up 20.2 cents. Tomorrow it will probably hit 1406, but may not pass the barrier on the first try.

Friends, I want y'all to think about this. You have been watching silver and gold push relentlessly higher, climbing that bull market "wall of worry."

Forget the worries -- the rally is on!

The US DOLLAR INDEX ran up to its 200 day moving average today and then collapsed, ending down 42 basis points & back at the bottom of the range. The range, by the way, is tightening, so expect some resolution up or down soon. I'm guessing it will rise, but that's only a guess.

STOCKS today put in a sad performance, rising 102 points on early news that BHP Billiton & Rio Tinto are thinking about buying Dow component stock Alcoa. Why do I call that sad? Well, think about it. A person who would buy Alcoa on that news is a hopeless victim, chasing a market. A deeper look shows that the Dow only rose to last Wednesday's highs and put a nice triple top on the chart. Tomorrow the Dow must advance again, through 12,700, or the triple top becomes the only explanation.

The DOW IN GOLD DOLLARS rose slightly today, to G$394.03 (19.06 oz), yet remains in its broken-downness, having fallen through G$400 and nearly touching its 200 DMA. To confirm the downtrend the DiG$ needs to close below 388-390. Anticipating that, I would swap stocks for silver & gold. (Only exceptions would be precious metals stocks, or special situations, like a company with a cure for cancer.)

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.