Wednesday, September 12, 2007

Gold Must Break Through 710, then 720 if it is to Run for 780

Whoo-ee! That US Dollar Index has painted quite a Niagra Falls on its chart the last six days. Pitiful, but probably somewhere near an end & turnaround. The outside & improbable outcome I've been looking over my shoulder for is a suddenly rallying dollar. It would really upset the apple cart for silver & gold & for stocks.

However, as the dollar's decline lengthens, a dollar rally becomes more and more probable, and less & less improbable. The Feb. 1992 Dollar Index low was 78.19, the only close below 80 in the last 37 years since Comrade Nixon disconnected the dollar from gold & put the whole world on floating exchange rates.

Wow. It's great to be part of history, huh? It's almost like being a galley slave at an oar on one of Nero's galleys.

SILVER has worked up to its 50 DMA (1256.9), made a 61.8% correction of its last fall, hit its 300 DMA (1271), and neared the upper downtrend line. What more can you ask? A clean breakout over 1300 the first day, continuing the climb the 2nd & 3rd days.

Stocks, having recovered a measley 46% of their fall at best, now struggle unsuccessfully to remain above 13,300. Watch the 12,800 level, next significant resistance. A Dow break below that number risks not a Niagra but an Angel Falls.

GOLD must break through 710, then 720 if it is to run for 780. A sudden jump to 720, back off to 700 or 690s, then another jump that fails to break 720 would be fatal. Any approach to 720 must break clean thru & keep on going. Gold simply has not yet made clear that its new rally has started, although since the last peak was 16 months ago, the time for another rally draweth nigh.

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.