Friday, August 17, 2007

GOLD Dropped an Eye-Popping 20 Bucks Yesterday and SILVER 105 Cents

Gold Price Close Last Week : 670.30
Gold Price Close This Week: 656.90
Change: -13.40 or -2.0%

Silver Price Close Last Week : 1282.5
Silver Price Close This Week: 1177.2
Change: -105.30 cents or -8.2%

What a week! It was the worst panic & liquidity crisis since Long Term Capital Management in 1998. The Fed, in collusion with the European & Japanese central banks, has been pumping in liquidity by buying worthless mortgage backed securities that the market won't touch. Lo, that lays to rest forever the deflationary arguments and proves that no matter how much inflation it causes, the Fed & the government will pump in money in any crisis -- even if it ends in hyperinflation. The liquidity crisis is such a powerful downdraft that it sucked down silver & gold with it.This presents us with a magnificent buying opportunity.

STOCKS today gained 233 points (Dow) but remain below critical 13,250 resistance. Since the Plunge Protection Team was formed in 1987, who can say what the "market" is doing? Who knows when it it the market, and when the Nice Government Men doing the buying? It mattereth not, after a short-covering rally, stocks will resume their downward plunge. Look for stocks to grind lower into October. Swap stocks for silver & gold, now, more than ever.

The US Dollar has begun a rally, but kept on getting its jaws slapped this week. Still, it is rallying. Big resistance at 82.35. Could rally all the way to 85. Be cool -- it's only a countertrend rally, and the trend remains DOWN.

GOLD dropped an eye-popping 20 bucks yesterday and SILVER 105 cents. This is the V-bottom correction of the entire first leg of the bull market, offering us a golden (owch!) opportunity to buy in at a low. Gold & silver have seen their lowest, or will within another 4 days. However, they will likely languish sideways until November. Since we can't know exactly where they will stop, start buying silver & gold here. Maximum possible downside is 910 & 600. GOLD/SILVER RATIO may reach 60 or 57.5 during this correction. Any price of 57.5 or more means you should swap remaining gold for silver.

Remain calm. Now, when you are most terrorized, you must control both fear and greed. Remember the long term trend, and go with it. Get rid of stocks & get into silver & gold. Next move up will be the most violent and spectacular.

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.