Thursday, April 19, 2007

Corrections Cleanse the Market and Make Silver & Gold Even Stronger

The GOLD PRICE made a low today at 678.50 (down 10.60) but came back strongly at the close, down only 4.20 at 684.9 As I said a couple of days ago, expect a shallow correction that takes gold down to 675.

Today the SILVER PRICE dropped as low as 1348 (down 46.9) but climbed back to close at 1371.6, down only 23.30. Remember a few weeks ago when silver had tough work to climb through 1345? That 1345 will act as support moving downward. I expect that price to hold, but if it doesn't silver could drift on down to 1315 - 1330. 50 day moving average stands at 1356 today & 200 DMA at 1256.50.

I know that no discipline is pleasant for the moment, but corrections cleanse the market and make silver & gold even stronger than they were. When they leave you too nervous, try concentrating on the long term. Silver & gold are in a bull market, a long term primary uptrend. Look at this little move against that background, and it ought to calm you.

Nothing to say about the Gold/Silver ratio today. It rose, as you would expect when metals are weak. The only difference between a rut and a grave is the depth.

Most significant thing that happened today was not the fall in gold, but the rise in the Dow in Gold Dollars. A little falling wedge had been building for several weeks, which normally points to an upside breakout. It also broke through the downtrend line that runs back to the first of January. It measures to a target of only 395, the top of the 380 - 394 range we've been watching. Plain message? That stocks will outperform gold for several days, maybe two weeks.

STOCKS were closing down 4 points or so, yet when the settlement came in Zutz! Last minute buying pushed the Dow up to a new high by 4.8 points. Since I expect stocks to begin another massive bear market leg down later this year, higher stocks & lower silver & gold is a heaven-sent opportunity to me to swap stocks for silver & gold. Stocks are headed higher near term.

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.