Staring at that GOLD/SILVER RATIO chart, I got the sudden impression that the ratio is about to drop off a cliff. As soon as it breaks 48.25 (about 40 basis points lower) it will hit air & drop like a hammer on your bunion. Next big stop is below 35:1, so if you ever want to make a gold/silver swap,
better do it now.
On 30 May I wrote, "If the DiG$ stalls at G$436, then fails by closing below G$425, then G$415, it will be Katy-bar-the-door for gold, & it will rally all summer." Perhaps the "all summer" was a tadge generous, but against stocks gold will certain rally. Today the DiG$ closed below G$420 at G$419.73 (20.30 oz), headed for support at G$415. What I envisioned on 30 May was the DiG$ dropping very sharply from that strong barrier at G$436, and drop sharply it has. We still need that last confirmation of a close below G$415 (20.076 oz) to close the argument, but with the Dow closing down 80 points today & gold holding firm, that looks likely.
Stocks themselves are crazy. The close today below 13,600 was a nasty psychological blow, but it might not be correction time yet. By the way, when stocks finally do break, whether now or 2 months hence, twill be a bloody disaster, 20% or more in a short time. Be warned: swap stocks for silver & gold. Non-confirmations occur when two indicators contradict each other; they can be bullish or bearish.
US DOLLAR INDEX fell through 82 today like it was a trap door, and closed below 81.90 at 81.875. It looks weak -- couldn't stay above its 50 day moving average, couldn't pierce 82.35. The May low was 81.25, and it will probably re-visit that shortly. If it closes below 81.25, it could sink to 80.50. All this is consistent with, but not necessary for, a silver & gold rally.
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.