Monday, June 11, 2007

Gold & Silver Bounced Back Very Nicely Today

GOLD & SILVER bounced back very nicely today, but gold still needs to close over 660 and then keep marching. Thinking about silver today I went back to look at its performance against the 300 day moving average. Interesting. Only once since 2003 has silver broken that 300 DMA, and that was in August 2005, right before silver took off for a huge rally into 1500. Today the 300 DMA stands at 1260.

Thinking about this baffling market, I keep on coming back to the same truth: in a bull market, the best strategy is to get long, stay long, and get longer. Be patient. Keep on buying. Higher silver & gold prices are coming, whether next week or next month or next year. Don't let impatience play you for a sucker.

I don't like double closes. That is, if I were a fan of stocks & bullish on them (which I am not, any more than a Rhode Island Red is a fan of Kentucky Fried Chicken), I would turn green around the gills looking at today's Dow close, up a gigantic 0.57 point against Friday. Double closes do not always but often seem to mark tops. More, stocks today rallied all day, working to a high of 13,478.11, but fell off at the close. Bad juju. Makes you hear tom-toms in the background. Ominous. Swap stocks for silver & gold.

After last Friday's performance, closing at G$429, I wondered what the Dow in Gold Dollars would tell us today. It fell back to G$424.15 (20.518 oz). It still hasn't given us an unequivocal signal yet. That would require a close above G$436 (21.092) or a close below G$415(20.076 oz), but it appears headed for that G$414 sooner. That means gold will be outperforming stocks for quite a while to come.

The US DOLLAR INDEX held on to Friday's breakout gains, closing at 82.696. Having jumped the fence at 82.35, the dollar is now free to rally for several months. Look for it.
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.