Friday, June 01, 2007

The Silver Price Rose 5.8% and the Gold Price 2.5% This Week

Gold Price Close Last Week : 655.10
Gold Price Close This Week: 671.20
Change: 16.10 or 2.5%

Silver Price Close Last Week : 1293
Silver Price Close This Week: 1368.1
Change: 75.10 cents or 5.8%

The SILVER PRICE rose 5.8% this week and had three 20+ cent days out of four. Not bad, I'd say. It blasted through 1305 first, then never even looked at 1325-1330, but cleared them and closed just under 1350. Today it o'erlept that barrier, too. Today's close cleared the 50DMA (1340.3), the last hurdle.

The GOLD PRICE began slow & sickly, then closed the week up 2.5% & above the dreaded 667 resistance. There's a little resistance at 672, but the next big wall between gold & 720 is the old high at 692. Once thru 692, gold will run for 720. Of course, it's always possible to misinterpret a market at trend changes & after a long correction, but right now silver & gold have everything right. Unless they close below 1340 & 653, they will run farther & higher. Right now I am lookin for something unusual for both metals: a strong summer.

Next week will probably see an attack against metals on Monday, which they should fend off with one hand, then rise the rest of the week. I am buying both silver & gold now.

Here's a bit of esoterica that only y'all & I & the few other folks who watch the Dow in Gold will understand. Today the Dow made a new all time high, but measured by the Dow in Gold Dollars (DiG$), it actually sank today from its Wednesday close at G$431.51 (20.874 oz) to G$420.95 (20.364 oz.) Of yet greater import & weight were the resistance/support levels it touched in the process. Even with the Dow at an all time high & gold correcting, the DiG$ failed to reach the last significant high at G$436 (21.01 oz), then turned down and fell through support at G$425.

That flashes a bright message: gold has turned against stocks. Gold will start gaining on stocks. What would negate this conclusion? A DiG$ close above G$436 (21.01 oz). Recall that for the last 11 years, the DiG$ has been the very most reliable indicator of how stocks & gold will acquit themselves. The lesson? Swap stocks for silver & gold, and stay swapped for the rest of the bull market.

By the way, the Dow in Silver ounces sank below 1,000 oz this week, and lost a whopping 4.3%. The DiSoz has been just as reliable as the DiG$: silver is about to outperform stocks for a long time. Only a close above 1,107 would negate that.

The GOLD/SILVER RATIO dropped 3.2% this week, & now stands below its 17 day moving average (50.59) its 50 DMA (50.10), & its 200 DMA (49.60), closing today at 49.061. All those moving averages are headed down, too. Since the ratio usually falls when silver & gold are rising, this indicator is flashing "Higher prices" for silver & gold.

The US DOLLAR INDEX, having risen to resistance at 82.35, has been unable for the last week to do anything about it. It rises a few basis points, then falls right back. I still believe it's going higher, but any close under 82, then 81.50 would bring new lows.

Y'all enjoy your weekend.

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.