Friday, August 03, 2007

After Today, You Must Buy Gold

Gold Price Close Last Week : 660.00
Gold Price Close This Week: 672.50
Change: 12.50 or 1.9%

Silver Price Close Last Week : 1264.3
Silver Price Close This Week: 1310
Change: 45.7 cents or 3.6%

After the fog clears, you can see a long way.

The GOLD PRICE successfully withstood an attack this week, exactly the sign I was looking for. Today it closed above 667, & has risen strongly in the aftermarket (up $2.00). Next -- probably next week -- gold must beat its July high at 684.20. That takes gold back to its last critical failure at 690, so that whole area from 684 - 690 will be hard fought. From here, my money is on gold. After today, you must buy it.

The SILVER PRICE closed today at 1310, pennies below its 200 DMA at 1312.78, but above the 50 (1302) and 17 (1304) DMAs. It has formed a large falling wedge, which normally resolves in an upside breakout. Silver has not yet done more than keep pace with gold through this move, so the Gold/Silver Ratio is due for a large drop from this 51-ish range. If you are ever going to swap gold for silver, this is the time. And don't forget to buy silver, too, & to buy more silver than gold.

The US DOLLAR INDEX fell back, giving up most of last week's gains, 58 basis points of it today. This is a sick currency, but then, that's no news to anyone who has been watching. A close below 80 risks a plunge to 78.2, the 1992 low. On the other hand, if it stops here it will have built a double bottom for a rally. Can the buck really be reacting to the subprime bad news? Surely that was already in the market. Nay, it hath problems of its own.

STOCKS bounced yesterday, then gave up everything & plunged today to their lowest point yet in this correction. The Dow has now fallen below its 50 day moving average (13,562). Nothing -- no support -- now stands between here and the 12,785 February high -- call it 12,666 where much trading took place. The broader S&P500 took an even bigger hit today. Stocks will go lower next week. There will come a rally, but it, too, shall pass. Use every such opportunity to swap stocks for silver and gold. Get out while you still can. Sauve qui peut!

The DOW IN GOLD DOLLARS has fallen thru the crucial G$415 (20.076 oz) level, and thru its 200 DMA (G$407.14/19.695 oz). Now loometh the even more critical G$400 (19.35 oz) level. The DiG$ had mounted a rally from its 14 July 2006 low at G$333 (16.109 oz) to G$436 (12.092 oz) in October 2006, backed off to G$369.75 (17.887 oz), then climbed again to challenge G$436. At that point, it had also climbed above the long term downtrend line, but that challenge failed. Now the DiG$ is poised at that downtrend line, and has a long, long fall coming. Stocks are in big trouble against 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.