Thursday, April 12, 2007

Any Close Over 686.5 and Gold Will Run Fast For 720

The GOLD PRICE keeps on hitting its head on the ceiling of the last high (686.50). It still has plenty of room to move higher. Present dullness suggests gold may see a shallow correction here, then come back to roar through 686.50. I don't see a big fall, though. Any close over 686.50 will run fast for 720.

SILVER and gold look much alike here but silver lacks enthusiasm. The present upmove shouldn't be more than halfway finished in time. Tracking with gold, silver could correct shallowly. The barrier here is 1400, and the must hold point is 1350.

When might the logjam break? The GOLD/SILVER ratio gives a clue. Bumping along its 50 day moving average (48.96), it is ready to drop through that mark. If so, it will then drop sharply, that is, silver will take off.

In December the dollar bottomed at 82.35. Today it has arrived at that same point. Today either marks the threshold of a breakdown, or a double bottom. We can't know until the buck confirms one way or the other. If it drops any lower, it will keep on falling to 80.39 (Dec. 05 low), maybe lower. But right now it looks like a double bottom, a fit platform from which to launch a rally.

Stocks bounced today off their 50 day moving average, but it looks to me like the Dow has completed its correction off the February 27 drop & now is ripe to resume falling. A close above 12,593 explodes that theory. A close below yesterday's (12,484.62) confirm that the dropping has begun. Don't wait for that to happen. Swap stocks for silver and gold now.

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.