Tuesday, June 26, 2007

The Gold Price Joined the Silver Price Over The Cliff Today

Today's markets tell a tale quickly told: everything is sinking out of sight.

The Gold Price joined the Silver Price over the cliff today, falling 9.20 to 642.10. It opened at 651, made a high at 651.30, a low at 640.10, and closed (on the cash market) at 640.65, 642.10 on the spot futures. In the aftermarket it has dropped to 639.20. Months ago I said that if it broke, gold might drop to 635. That still looks like a good target with support there and the 200 day moving average (638.75) and 300 day (636.66). If that doesn't hold, it could drop to 600 or even 560. However, it looks awfully oversold.

SILVER cranked up its jets today for a 59.6 point flight. Unfortunately, the jets were pointed the wrong way. Silver hit a high at 1287, and a low at 1211, but rallied off the low to close at 1227. In the aftermarket it has traded as low as 1221.5. The worst news is that this could mark the beginning of a great correction that might send silver to 950 or 1000 or 1100. On the other hand, looking back at the April 2004 and May 2006 peaks, during this silver market one strategy has always paid off: buy the steep falls. Within a few days they hit bottom and the first fall usually marks the greatest depth. Also, silver here has fallen through its 200 & 300 DMAs, only the second time it has pierced that 300 DMA. That suggests this is a clever, but stomach wrenching place to buy. Certainly, there's enough blood in the streets.

Get your eyes up, folks -- it's a long term bull market. Take the down days with the victories. You'll yet sing again the praises of silver & gold.

Stocks show a double top. When they break 13,250,they're gone. Get out of stocks & into cash until silver & gold settle down.

The Dow in Gold Dollars rose again today, up G$5.60 to G$429.39. The more times anything knocks on a door of resistance, the bigger the chance the door will open. It is looking more and more like stocks will get past this G$430 or so resistance. Need a close below G$415 to gainsay that.

The US Dollar is scrabbling hard at the 82.35-ish support level, but it hangs by a thread. If it breaks that line, nothing to stop it but 81 or 80.50. Stinks.

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.