Wednesday, November 07, 2007

Silver Price is Headed Higher Still - Keep on Buying it, This Run Has Hardly Started for Silver

Gold Price Close Today : 831.00
Gold Price Close Yesterday: 820.80
Change: $10.20 or 1.2%

Silver Price Close Today : 15.272
Silver Price Close Yesterday: 15.327
Change: 5.5 cents or -0.4%

US Dollar Index Today: 75.55
US Dollar Yesterday: 76.01
Change: -0.46 or -0.6%

Yesterday I wasn't thinking very clearly. The gap up in silver was a breakaway gap out of congestion, while the gold would be a runaway gap. Gaps often get filled, so bear that in mind, too.

The SILVER PRICE today hit -- listen to this -- $16.20. But profit takers (or other shadowy characters) hit it & it closed down 5-1/2 cents. Calm down, it's all right, silver is headed higher still. Keep on buying it, this run has hardly started for silver.

GOLD, thanks to the US Dollar's drop, boosted US$10.20 today to close at US$831.00. Just in case you take the false notion that gold is merely mirroring the dollar, the dollar has recently lost 7.5% while gold has gained about 25%. Obviously, 'tis not the dropping dollar alone that is driving gold, although it certainly helps.

The US DOLLAR INDEX today fell through 76 to 75.554. Apparently the Bushites have taken a policy decision to solve their problems & the debt-ridden economy's problems by letting the dollar drop out of sight. So sorry, eggs -- they don't take us into account when they make omelets. Of course, if y'all stay in their pan (keep holding dollars) then you can't really blame the chef, now can you?

Mercy, look at that Dow in Gold Dollars!! It has collapsed. Closed today at G$330.85 (16.005 oz), barely 56 gold cents above the May 2006 low at G$330.29 (15.978 oz). SO? So that has so far been the very lowest point in the entire decline from August 1999 until now. Beneath here there is no support at all. None. Stocks are going to lose some huge amount against gold unless they literally turn tomorrow and rise.

The Dow fell badly and closed nearly on its low. It's hard even for Nice Government Men to keep up a market that wants to fall 350 + points a day. The Dow close at 13,300.02 wasn't far above the 200 day moving average at 13,212. For new subscribers, the 200 DMA forms significant support in bull markets, significant long term resistance in bear markets. Falling through it is bad juju, as Tarzan might say. On the chart the Dow has droawn out a seires of failed highs and lower lows, which makes -- face it -- a downtrend.

Tomorrow it will most likely break down through the 200 DMA (barring NGM). Worse yet, ponder this: stocks have been for a long time moving opposite to the US Dollar Index. Today the dollar index dropped nearly 50 basis points, and the Dow joined it.

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.