Wednesday, October 10, 2007

Gold Price Needs to Exceed 747.20 to Avoid a Correction

The GOLD PRICE high today was US$745.90, but it closed at US$740.40. None of this helps much, since breaking out requires a close above US$747.20. Otherwise it must correct a while, and could drop to US$700. Tomorrow will probably decide. Failing to exceed 747.20 in the next two days will almost certainly send the gold price lower.

Comparing some of the SILVER PRICE moving averages leaves me impressed that there is no turning back for the silver price. We have seen the lows. Indeed, today the silver price crossed 1350 but 1380 remains the high hurdle.

Still looking over my shoulder at that GOLD/SILVER RATIO. It ought to turn down, but could very well rise to 57.50 or even 65. The Ratio needs to drop below 51 to prove it doesn't mean to backfire on us.

The US DOLLAR INDEX has given up everything gained since last Friday, but will yet rally (soon) to its 200 Day Moving Average (about 80). Bank on it. [That was a joke -- get it? "Bank" on it -- as if you could trust banks, the most untrustworthy corporations on a planet crowded with untrustworthy corporations? Well, I thought it was funny.]

STOCKS backed off today. Yesterday's new high may be meaningless because markets really need to exceed an old high by at least 2%. In this case that would put the Dow at 14,302. However, the S&P500 did make a new all-time high yesterday, & it hath long been weaker than the Dow.

The DOW IN GOLD DOLLARS (DiG$, the Dow measured in gold instead of paper dollars) dropped today. It needs to close below G$385.77 (18.662 oz, its most recent low), & to speed up the collapse really needs to close below the February lowa t G$369.25 (16.201 oz.) Wait -- it's coming.

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.