Monday, November 26, 2007

We Will Probably Never Again See gold Below $800 or Silver Below $14.50

Gold Price Close Today : 826.00
Gold Price Close Friday: 824
Change: 2 or 0.2%

Silver Price Close Today : 14.817
Silver Price Close Friday: 14.715
Change: 10.2 cents or 0.7%

US Dollar Index Today: 74.80
US Dollar Index Friday: 74.55
Change: -0.25 or -0.3%

Remember the proverb, "When the fat cats are away, the rats will play"? That often happens on market holidays, when the crowd is thin, & the floor traders "run the stops", taking the market much higher or lower than it had been, but without any meaning. As soon as the fat cats come back & resume positions, the holiday action fades, unless it was a genuine move.

Wednesday we went home to the GOLD PRICE at 797.60, and Friday it leapt to 824! so what? The Dow rose 181 points, too. "What" is that the Dow fell 237 points today, gainsaying the Friday surge, while the gold price closed up 2 bucks at US$826. Guess which shell the pea is under?

Friday's high gold price close took the Gold/Silver Ratio up to 56. Leaves the recent price action looking like failure along the downtrend line, i.e., failing to break out to the upside. That hints at silver beginning to outpace gold soon. (Yes, a gold/silver ratio close above 56 would overturn that conclusion.)

Friday's gold price close at 824, plus the follow-through higher close today, plus gold's upward straining in the aftermarket Tuesday & Wednesday leave me persuaded that gold bottomed last Monday, along with silver. Therefore, if you have been waiting to buy, stop waiting and buy silver & gold. We will probably never again see gold below 800 or silver below 14.50.

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There's no question in my mind that Bombasto Bernanke has de facto devalued the US Dollar. Today the buck is making (as usual) new lows, down 25 beeps from Friday to 74.8. My guess is that a slow erosion is planned, down to 60 or so. If you own annuities, pensions, bonds, mortgages, anything that entitles you to future dollars, swap them as soon as you can for silver & gold.

STOCKS look almost as sad as the US Dollar. The Dow fell 237 today to 12,743, while the S&P500 at 1,407 has nearly fallen through 1,400. More proof you must flee stocks for silver & gold: Today the Dow in Gold Dollars sank to its lowest price since the Aug. 2007 high at G$925.42 (44.767 oz) to close at G$318.92 (15.428 oz). I can find no bottom on that chart, although there must be one.

The Dow in Silver Ounces today fell to 861.63, its lowest point since May 2006 when it hit 777 ounces. From its June 2001 high the DiSOz has fallen 64.5%, while the DiG$ has fallen 65.6%.

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.