Friday, October 26, 2007

The Gold Price is Now in Technically Uncharted Waters

Gold Price Close Today : 783.90
Gold Price Close Yesterday: 764.40
Change: $19.50 or 2.6%

Silver Price Close Today : 14.212
Silver Price Close 19th of October: 13.55
Change: 66.20 cents or 4.9%

In January 1980 at the last gold bull market peak the GOLD PRICE spent only 9 scattered days above US$710. Today marks gold's 30th consecutive day above $710, since 17 Sept. Besides, 1980's $710 equals a 2007's inflation adjusted gold price of $1,973.21. The gold price has so much further to run from here it's not even worth talking about.

The GOLD PRICE is now in technically uncharted waters, so it could run all the way to $850 before correcting. I bet everyone expects it to stop at the round number $800, but markets always disappoint. The larger target here is $1,000 and no barrier lies in-between. Get gold now. It's climbing a bull market wall of worry.

Do y'all see now what I mean when I call the SILVER PRICE "volatile"? It gained 70 cents in two days. I told y'all it would run when it crossed 1400. My target (if the dollar co-operates, as it appears inclined) is 1550 - 1600. By the way, silver's 1980 high at US$50 equals 2007's inflation adjusted gold price of $138.95. That number lies on the low end of my target range for this bull market.

Clearly the big story today was the US DOLLAR INDEX posting a new intraday low at 76.977, lowest since Nixon closed the gold window & broke the buck's link to gold in August 1971. No doubt the midnight oil is burning in central bank offices all over the world as they try to figure out how to put the status quo back together. From here the dollar must have less down-side than upside, since it has been falling so long. Yet it seems a rally will not come along in time to forestall a US$800 plus gold price and $15.50 plus silver price.

The Dow held on above 13,800 but now must clear 13,900 resistance. I'm still w watching the last low, 13,407 and the August low at 12,518. Any close below those marks spells "t-r-o-u-b-l-e." Watch the 200 DMA at 13,168 as well.

The DOW IN GOLD DOLLARS (stocks measured by gold) fell to a new low for the move today at G$364.09 (17.613 oz). Below here lieth only empty air, down to the May 2006 low at G$330 (15.963 oz), and lower down to G$310 - 300 (14.996 - 14.513 oz). My long term target at 2 oz = the Dow doesn't look so crazy now, does it? Swap stocks for silver & gold while you still have time.

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.