Wednesday, June 13, 2007

The Gold Price Went Sideways Today, & Gave us Nothing New to Go On

SILVER dropped today all the way down to 1281, then recovered to close above 1301. Since May silver has made three forays into that area, each a little higher than the last. This is either very bad or very good. We'll call it good if silver closes higher tomorrow.

The Gold Price went sideways today, & gave us nothing new to to go on. Until it makes a big move one way or the other, I can only keep saying, "It's ready, it's ready." Gold coin premiums are creeping upward, not by much, but even very subtle changes -- 1/4 of 1% -- point to buying pressure, so demand is strong for physical gold, the real kind, the kind you have to put up 100% of the money for, not the margined-derivatived-leveraged paper kind. To me, that kind of demand has more garlic in it.

Today's market offers a piercing example why it is so hard to short stocks, even though you are "sure" that they have topped. The Dow came back 187 points today -- rough treatment if you're short. Today also offered us an example of the strange mathematics of the Dow in Gold Dollars. At the Comex close gold had dropped 30 cents today, nothing at all. Yet the DiG$ rocketed up G$6.22 (0.301 oz) because while gold was steady, the Dow rose sharply. So here we are, still without a decisive breakout in the Dow in Gold Dollars, up or down. It closed again today at G$429.97, a double top with late May's highs. The DiG$ is beginning to resemble its pattern last October, when it put in a double top before failing -- in fact, a double top in the same area. This will unfold plainly in the next few days, either failing here or moving higher.

Why is that important? It will tell us which will perform better over the next 6 months or so, stocks or gold. Need I add that I expect gold to outshine stocks? Why, I would even swap stocks for silver & gold.

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.