Tuesday, November 06, 2007

Is There Still Time to Buy Silver and Gold?

Gold Price Close Today : 820.80
Gold Price Close Yesterday: 808.10
Change: $12.7 or 1.6%

Silver Price Close Today : 15.327
Silver Price Close Yesterday: 14.732
Change: 59.5 cents or 4%

US Dollar Index Today: 76.01
US Dollar 25th of October: 76.45
Change: -0.44 or -0.6%

I have to confess, y'all, that yesterday when I wrote that about silver breaking out I was expecting it, but not necessarily today. (It did look good, though, didn't it?)

Let's talk about gaps. These occur when markets are extremely agitated -- exhaustion gaps & breakaway & runaway gaps. You don't know which until more trading occurs, but you can easily guess. After a market has been advancing for days, it gaps up, trades sideways for a day or two, then gaps down again. That's an exhaustion gap (& you can turn it upside down for bottoms), leaving an "island reversal."

But when markets have congested & kick into high gear, they leave "breakaway gaps." Breakaway gaps emphasize that a breakout has taken place, & the move is genuine & not false. They also yell that the buying pressure is much stronger than anyone thought, but they take place at congestion.

The runaway gap hits during rapid rises or falls. They tend to appear when the move is at its height, & about half-way from its beginning.

Today both the SILVER PRICE and the GOLD PRICE showed big gaps up on opening. Figuring that the gold move began 16 August at $648.30 & rose yesterday to $808.10, that's $159.80, plus the $808.10 gives a target of US$967.90. Silver's move began at $1146.50, then gapped after yesterday's close at $1473.20, or $3.267 higher. Add that to $14.732 and you come to a target at $17.999.

I just don't think these are exhaustion gaps, & all the less so because in the aftermarket silver rose from $15.327 (close) to $15.59 while gold rose from $820.80 to 824.70. Don't look tired to me. Is there still time to buy? Yes, most definitely.

Here's a hot news flash: and today the US dollar index made another new low. Dropped 43.5 points to close at 76.01, even trading to 75.988 at one time.

US Stocks, acting like hard assets as the flight from the dollar builds, rose today, but not giving any meaningful clues. Could have been merely the Nice Government Men fiddling around with the market.

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.