Tuesday, September 04, 2007

Gold Price Needs to Close Above 710 to Prove it has Turned Up Into a Rally

The GOLD PRICE broke out Friday from its short term downtrend but needs to close above 710 to prove it has turned up into a rally. Without that over-710 close, gold is still liable to see lower prices between now & November.

Both silver & gold prices are reacting against their recent drops, & such reactions (the "B" wave of an A-B-C down-up-down correction) can appear as strong as rallies. But since we have no crystal ball, we have to buy-and-hope sometimes. Whether we saw the silver & gold price lows in August, or we will see them between now & November I don't know, but sometime here y'all had better be buying silver & gold.

SILVER PRICES jumped up today, but remember that a rally to 1241 would only mark a 50% correction of the recent fall. Resistance stands at 1225-1235, & to close above the downtrend line silver needs to close over 1300.

I know that the August drop brought in hordes of silver buyers because premiums have risen on every form of silver, & supply shortages & delays have appeared. That points to stupendous strength.

The GOLD/SILVER RATIO has not yet during this correction reached even 57.50, let alone the 60.00 I have suspected we would see. Swap gold for silver if the ratio reaches 59:1.

What a great time to be a silver & gold investor! The bottom of this correction will mark the first major correction of this bull market. Once this correction ends, the most powerful, most violent, longest upwave will begin that will smash through $25 for silver & $1,000 for gold.

If you are to survive the barrage of government & Federal Reserve lies aimed at keeping you in their trap & picking your bones clean, you must keep your eyes on the horizon -- the long term. Coming out of the subprime liquidity crisis, Bush, Bernanke, & Paulson will keep pouring in new money & drugging you with pronouncements that the "economy is sound." They are desperately trying to keep up housing prices & stocks, but both will continue to lose value against silver & gold, even if they appear to gain in nominal dollar terms.

Here's an example: stocks topped at 11,722 in January 2000, went down nearly to 7,500, then rose to 14,000 in July 2007. What profited the gain? In inflation adjusted terms, 14,000 only equaled 2000's 11,722. Against gold & silver, the Dow dropped more than 50% in that time. Real estate has also dropped against metals. So, friends, keep your eyes off the bait & on the hook.

Today the Dow made its second day close through its 50 day moving average (13,4452.93) and above its downtrend line. Target? 13,695, the last high. Advice? Swap stocks for silver & gold, now.

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.