Monday, October 22, 2007

Gold Price Could Now Head to $800 Anytime

Gold Price Close Today : 755.80
Gold Price Close October 12th: 748.70
Change: 7.10 or 0.9%

Silver Price Close Today : 1347.5
Silver Price Close October 12th: 1380.3
Change: -32.80 cents or -2.4%

Sorry about missing three days last week. I had to travel & neglected to warn y'all. I'm comparing prices Friday a week ago with today's (Monday's) prices.

The GOLD PRICE decided to run wild while I was out of town. It could now head for US$800 anytime as the fiddling around today probably amounts to no more than breath-catching for a run at US$764.50 which has twice stopped gold. Only caution about today's close at US$755.80 is that it fell below US$757.50 which had been serving as a floor briefly. This leaves gold on its uptrend line, so tomorrow it must close higher to hold on, which I easily expect. Y'all may see US$800 gold by week's end.

The SILVER PRICE, oddly enough, looks like gold on the chart, only slower. It has completed a long, straight run up & squiggled sideways. Figuring that might be half-way and guessing, that offers a target for this run of 1552 cents. So why all the sweat getting here? Don't forget that a bull always tries to shake off as many riders as possible.

STOCKS have fallen below their 17 day moving average & 50 DMA & headed for support at their bottom trading channel line about 13,425. If they crack that, then the 200 DMA stands at 13,135, & more important, the last low at 12,838 (August). Deeper down lies the 12,063 March low. A close below 12,838 force me to interpret the chart pattern as a double top or perhaps broadening top pattern. That second is slow to unfold sometimes and frustrating, but utterly certain. The 2000 peak formed as a broadening top, & at the end had dropped 38%, from 11,722 to 7,286.

Lest I fill your ears with incomprehensible jargon, telling you that the chart shows a "double top" or "broadening top" translates, "Stocks should fall like the car keys out of your shirt pocket when you lean over the Tallahatchie River bridge to look down at the water." Is that plain enough? Friends, get out of stocks & put the money into silver & gold, if you want to save it. I know all your financial advisors & gurus & other lamprey eels & pilot fish that feed off you will scream that you've gone crazy, but that's because they don't want to see their meal ticket disappear, or because they can only think as they've been taught. It's not their money that will evaporate in stocks, or their future.

The Dow in Gold Dollars (plain English: Dow measured by how much gold it takes to buy it) evidently had strong support at G$385 (18.624 oz.) because once it fell thru that mark, it couldn't find the brakes until it hit G$365.68 (17.690 oz). It fell that far in five days, but mostly in one: last Friday, when it dropped from G$379.02 (18.335 oz) to G$365.68 (17.690 oz) in a single day. Recall that I warned y'all in August when the DiG$ fell thru critical G$415 (20.076 oz) support that it was signalling stocks would weaken against gold. Well, Old Reliable nailed it again -- best indicator I know.

Out on a limb I will guess that the US DOLLAR INDEX bottomed last week about 77.40. Right now it's trading at 77.957, up 61.6 basis points from Friday. This might spell trouble for silver & gold, but I believe the dollar will take time to catch up to them, long enough

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.