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Friday, September 28, 2007

Gold Prices Will Run to at Least 790-800 Before They Take a Breather

Gold Price Close Last Week : 731.40
Gold Price Close This Week: 742.80
Change: 11.40 or 1.6%

Silver Price Close Last Week : 1347.5
Silver Price Close This Week: 1379.4
Change: 31.90 cents or 2.4%

Whoa. Deep breath.

It took SILVER and GOLD PRICES all week to batter through 733 & 1350, but today they smashed that barrier & tore it apart. Gold rose US$10.10 & silver 27.7ยข. I'll get back to metals in a second -- let's look at other things first.

The US Dollar Index fell through 78.19 like an anvil through a rotten porch floor. The Japanese & Euros were already whining and croaking about the low dollar hurting their exports to the US, so what do you reckon they're saying now? I suspect Bernanke & Bush are getting an earful about doing something to raise the dollar's wretched exchange rate. (See how ridiculous all these fiat currencies are?) I will be more than mildly surprised if either the Fed or the Euros don't make some announcement on Monday designed to take steam out of the Euro & put steam under the dollar. What a hoax! Whatever you do, get out of any & all investments that pay you dollars, euros, or yen in the future, things like annuities & pensions. They're sure losers.

STOCKS showed how little faith investors have in them -- all the Wall St. rats left that sinking ship, taking their week's profits with them on their way to Long Island & their martini. Dow in silver & gold is sinking apace. I repeat my plaintive plea: swap stocks for silver & gold, while you still can. Even if stocks pierce the last top at 14,000, and make nominal gains over the next 10 years, they will still be losers compared to silver & gold.

Back to SILVER & GOLD. Today's breakout doesn't lend itself to two interpretations, only one: they're going higher. We're in the ether, here, with so little previous trading here that no resistance/support exists above us, except at 850. Surely gold will run at least to 790 - 800 before it takes a breather, & silver to 1500, maybe 1580 or 1600. Whoa -- 1800 is possible. Why, O Why didn't I buy options back at the bottom in August? No, can't think about that now, just rejoice you are long gold, and buy more. Lots more. It has another ten to 15 years to put gain in your pocket.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Thursday, September 27, 2007

Silver and Gold Prices Keep Smashing Into Resistance at $733 and $13.50

Like a battering ram, both silver and gold prices keep smashing into resistance (733 & 1350), making a little headway every day. Why do they seem so strong to me? Because they hit, then back off only a little, a very little, then hit again with more force, and keep on hitting. Yet this can't keep up forever. They will break through or fall back to rest for another try. For now, my money sits on "Break Through".

September 1979 was the first month the silver price broke through $10.00, as I remember. By January 21, the silver price had hit $50.00. When metals move, they move fast. Y'all ought to be buying silver & gold right now.

The US Dollar Index gave up yesterday's gains & fell back about 20 basis points. It's feeling for a bottom. Don't be short dollars right now. To much risk of a sudden rally that will send the shorts fleeing in panic.

Every day pushes us closer to the Cliffs of Decision. STOCKS seem bent on re-touching Dow 14,000. Although the Dow Industrials are reaching for their old high, the Dow Transports are content to remain below their 50 & 200 day moving averages, & look set to fall off the Cliff of Decision. Personally I expect the Dow will touch 14,000, then descend to the nether world, having posted a huge double top, but I will admit that the Dow could press through 14,000, taking with it the savings of the unwary all over the world. Beware stocks! Swap now for silver & gold.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Wednesday, September 26, 2007

The Gold Price Correction May be Completed, If Not Buy Gold Around 710 - 712

Nothing stands still forever; markets moved today.

The GOLD PRICE support at 726 held today, as it did on Friday & Monday, although it dropped to 722 today. Odd -- what's that figure coming out on the three day chart? Is that a reverse head-and-shoulders? If so, yesterday's drop to 722 completed gold's little correction, readying it to burst through 737-738 resistance.

If, on the other hand, gold should drop, buy like a maniac with a charge card around 710 - 712.

The SILVER PRICE has a harder row to hoe than gold. 1365 - 1350 form the ceiling to break, and there is support from 1335 all the way to 1320. That reverse H&S appears on the silver chart, too. If so, it will cross thru 1365 on its way to 1500 by Thursday.

Mmmmmmmm. . . Been thinking about that GOLD/SILVER ratio. Have about concluded that 57.159 on 21 August was not only the top, but also confirmed the price lows in silver (1146.50 on 16 August with 1148.90 on 21 August) and the price lows in gold, too. We're not going to see the ratio move any higher. If you still want to trade gold for silver, better do it quickly. Next target is under 35.

The US Dollar index hit a new low today at 78.21, close enough to the 1991 low (78.19) to call the same. Ahh, but it also closed higher, the first half of a key reversal (must also close higher tomorrow). Will the dollar keep on falling, or turn & rally? Call me crazy, but I think that's about enough falling for now & a rally will begin tomorrow - or soon, anyway.

STOCKS beat their way through 13,800 today to close at 13,878, up 100 points. This might be a double top forming (with 14,000) or it might be a new leg up beginning. But why do the recent days trace out something that looks so much like an island reversal, although technically its not? No way to tell until Dow closes above 14,000, or falls below 12,838. No matter -- I would still swap stocks for silver & gold.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Tuesday, September 25, 2007

Little Correction or Breakthrough, it's Time to Buy Both Silver and Gold

Except for the dollar, which keeps falling like your watch into a well, markets have reached a standstill.

The GOLD PRICE doesn't appear weak exactly, but obviously 732 has become the price to beat. We'll either get a short correction here, or it will burst that wall in $10 leaps. (Short correction means $10 - 20.) Oddly enough, a good bit of our physical business last few weeks has been people selling, mostly Y2K buyers who have gotten tired of holding.

To the rest of y'all I say, don't get tired of making a profit. Silver & Gold Prices right now are on the threshold of a move that will make 2001 - 2006 look like chicken feed from Bullfrog Corners.

The SILVER PRICE has stalled like gold, at 1350. It's hard to keep the pressure up at a line this way, so a decision will come here soon. Little correction or breakthrough, it's time to buy both silver and gold.

Stocks hit the wall at 13,850, and since have looked ready to nose dive. Today's little turnaround with the Dow up 19.59 (whooo -- big deal, that!) & the S&P500 down .52 looks like a confused market, and confused markets don't usually rise. Anyway, y'all don't care, right? Y'all are all light-hearted & gay because y'all have already sold your stocks & bought gold & silver with the proceeds, right? You don't have to worry about landing unawares in the next financial hurricane the Fed launches, huh?

THE US DOLLAR INDEX fell another 20+ basis points today to lodge at 78.319, a bare 12 points off the 1991 low. Look for it to hit 78.19 tomorrow, then, say, drop another 20 basis points, and then blast up in a rally that picks all the shorts' pockets and wallets. Watch it like you'd watch a canebrake rattler.

This came from Elliott Wave International by way of Al Thomas' Mutual Fund Magic today; "Where do you think home prices will be in 2011? Last week the Chicago Mercantile Exchange pushed the futures contracts on the S&P Case-Schiller Home Prices Indexes out to five years. Traders think Miami home prices will be down by 8.3% in 2008; 15.1% in 2009; 19.7% in 2010, & down 25.6% in 2011."


Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Friday, September 21, 2007

Silver & Gold Prices Broke Out Last Week & the US Dollar Index Broke Down

Gold Price Close Last Week : 709.60
Gold Price Close This Week: 731.40
Change: 21.80 or 3.1%

Silver Price Close Last Week : 1254.4
Silver Price Close This Week: 1347.5
Change: 93.10 cents or 7.4%

Enough tumult this week to satisfy anybody. Technically, stocks, silver, & gold prices all broke out last week, and the US Dollar index broke down. Question is, how much longer can it last?

Technically, the GOLD PRICE ought to reach 790 before it undergoes another major correction, but a close below 700 would hit it hard.

The SILVER PRICE improved in the last few days, bring the GOLD/SILVER ratio down, but not much. Silver's job next week is to pierce 1350. A close below 1300 would take it lower.

It is really not too amazing that stocks & metals are moving together, when you think about it. After all, both classes represent alternatives to the US dollar. Stocks are evidences of bricks & mortar & machines, real things like gold & silver. Evidence from the past, though, shows they can never keep up with silver & gold during a really bad inflation.

The Dollar Index is the keystone here. It is approaching its 1991 low at 78.19, the lowest price since 1971. Pause to think about it.

None of the other currencies outshine the dollar in fact; the yen is a phony fiat currency, as is the euro. Both have problems as bad as the dollar's, although not the same. More to the point, if the buck sinks to new lows against the yen & euro, what happens to the free ride the Japanese & Europeans have enjoyed since Bretton Woods in 1948.

Their currencies were pegged falsely low against the dollar, which was redeemable in gold for them, but not for us domestically. So US inflation at home put US manufacturers at a perpetual disadvantage, and it's been pretty much the same show every since (apparently, somebody wants to de-industrialise the US, somebody big).

If the dollar index sinks to 60, how will the Japanese & Euros compete for the American market? They can't, so pressure is probably building now for the US to raise the dollar's exchange rate. Next dollar move (okay, maybe it drifts all the way to 78.19) is more likely to be a surprise rally than a fall through the floor, if for no other reason that a low dollar kills the Japanese, Europeans, and Chinese.
But the key to the surge from metals & stocks this week was a weaker, not a stronger, dollar. Helicopter Ben Bernanke cut the Fed funds rate and the discount rate 1/2 %, flashing an unmistakeable sign to Wall Street and its troubled masses: "We will bail you out, no matter if it kills the dollar." Hyperinflation, here we come. (Who put this guy in charge?) How much lower can the dollar fall? In my mind, not much. So now that the drunk from Bernanke's rate cuts have worn off the markets, what will they do next?

Got me -- but any close below the August Dow low at 12,845 would pull the plug on stocks. It may be that after a short correction in metals, which I expect early next week, stocks & metals will part company & metals will resume their rises.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Thursday, September 20, 2007

The 2-Day Close Above 720 Confirms a Rally & Breakout, With a Target of 790 - 800

The dollar tanked, GOLD and SILVER PRICES took off, the stock market sank, and I am as lost as a golf ball in high weeds.

The GOLD PRICE jumped over US$10 today to give us the 2-day close above 720 I was looking for. That confirms a rally & breakout, with a target of 790 - 800. However, after so much gain in 4 days, don't let a little touchback correction to 720 demoralize you.

The SILVER PRICE hopped 36.5 cents today, enough to bring that GOLD/SILVER RATIO down a bit as it gained on gold. A Silver close over 1300 was my second condition for confirming a gold & silver rally. Now let's see if I was correct. Silver target is 1500 to 1551.

Only fly in all this perfumer's ointment is that US Dollar Index. A sudden rally could put the kabosh on silver & gold.

Today the US Dollar Index fell a huge 72.8 basis points to 78.605, about 40 basis points above the 1991 low. The thought that keeps on sloshing around in my brain is, "How much further can this go?" The dollar now has fallen mightily in response to the Fed's rate cut, and this is the third day and about when I expected the effects of that cut to trace out its last effect. The Dollar must be somewhere near its bottom, because if it falls through that 1991 low, it's unthinkable. It would mess up too much cosiness in the world monetary set-up, the cosy club of central bankers. Think: the Europeans & the Japanese don't want to see the dollar at 60, because it will make their products just that much less competitive. Since 1948 & Bretton Woods they've been used to a free ride on the back of an overvalued dollar, so they won't like a lower dollar. That alone makes me suspect that sometime soon the dollar will turn round, and stage an astonishing rally. Not that that means the dollar is a sound or worthy currency, but it is set for a big counter-trend rally.

Stocks fell back today, catching breath, and are not yet quite out of range of falling back & failing. Anyway, all of y'all have already sold your stocks & put the proceeds into silver & gold, as I've been begging you to for months -- right?

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Wednesday, September 19, 2007

Have Gold and Silver Reached Their Peak?

The tragejtory of all markets slowed today -- have they reached their peak and stopped, silver, gold, & stocks? Question will be answer by closes tomorrow. If a new rally is unfolding, then everything ought to close higher tomorrow. Yes, I know it makes no sense that SILVER and GOLD PRICES are moving the same direction as stocks, but everything is reacting to monetary conditions, that is, what is widely seen as an ailing dollar.

But now that Bernanke has fired his best shot, the dollar refuses to come unravelled. Today the dollar index in fact rose. What's a central banker to do, when he can't drive down the price of his own currency?

I am suspecting that the Fed's action has now been fully absorbed by markets, and driven them as far as it can. However, tomorrow's closes will clinch the case.

If it turns out gold and silver are headed higher, then gold will run for US$790-800 and silver for 1500. Don't ask me to tell you which outcome will happen -- I was carrying my crystal ball across the room today, tripped on the rug, and dropped and broke 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"
http://the-moneychanger.com/

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.



Tuesday, September 18, 2007

Gold Leapt From 715.80 to 723 After Fed Announcement - If it Holds Gold Will Run For 800

Lo, the Fed hath spoken, & eloquent it was, portentous for the future of Bernanke's reign. It was, in a word, inflationary. Shorn of its silly, toothless warnings, the Fed spake comfort & mountains of easy money to uneasy hearts on Wall Street. Paraphrasing Emma Lazurus at the Statue of Liberty, Bernanke quoth, "Send me your illiquid, your nouveau riche, your bankrupt millionaires, your real estate developers yearning to speculate, the wretched refuse of your scheming Street. Send these, the greedy, the reckless, credit-deprived & liquidity-tossed to me -- I lift my money machine beside the paper door!"

Helicopter Ben & his Money-makers reduced the federal funds rate (at which rate banks loan to each other overnight) by 50 basis points (1/2 of 1%), AND, to leave no doubt un-overthrown, dropped another 50 basis points the discount rate (at which the Fed loans to banks, which window few ever use). So there was a substantive rate cut along with an empty but publicity-pregnant gesture, all of which said to the world: "Come on down! There's free money for everybody, and we'll keep it flowing."

The Fed had a choice between keeping the economy going and keeping up the dollar. The Fed chose the economy and, eventually, hyperinflation. The Fed will keep on following this path, inflating whenever & as much as necessary to keep the appearance of the economy afloat. The future is clear, & there is no strong dollar in it. The deflationists' case died today forever, conquered by the political will to inflate.

After an unchanged close the Fed made its announcement, and gold leapt from 715.80 to 723, & silver to 1294. Those figures were goosed by the Fed; let's see if they hold up for a two-day close over 720. If they hold, gold will run for 800 & silver for 15.

The US stock market rose nearly 2.5%, which shouldn't surprise anybody -- so did the Fed purpose. The Dow stopped at the top of its range. Again I ask, can it hold that level two, even three days? Lots of folks are betting lots of money that it can. Don't be among them. Swap stocks for silver & gold, now, more than ever, do it quickly.


Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Monday, September 17, 2007

Gold's Breakout is Confirmed by a Two Day Close Over 720 Accompanied by Silver Over 1300

I really think SILVER & GOLD PRICES are due for a rest. Without one they crash through 720 & 1300, but run out of steam shy of 800 & 1500, then correct lower than they did in August. Rather, I'd like to see them struggle around here for a while, building a launching platform. Either way, by end-November both will have seen their lows. Breakout is confirmed by a two day close over 720 accompanied by silver over 1300. Silver's lagging still clouds the promise of a rally.

US Dollar Index rose again today, minutely. As they say in Tennessee, "What a joke!" They also say, "That old dog won't hunt." If you are holding any sort of paper -- bond, pension, annuity -- that entitles you to receive "dollars" in the future, get rid of it now. Swap it for silver & gold.

There's not much to be said about markets until the Fed speaks from Olympus' heights tomorrow about interest rates. Silly, since the market has already priced in a 1/4% interest rate cut. The Fed doesn't like to surprise the market, so it's most likely to give what everyone expects. If it were to cut more, 1/2%, then folks might panic out of the dollar, taking it as a sign of Inflations To Come. If the Fed cuts not at all, stocks tank since everybody expects the Fed to bail Wall Street out of its subprime swamp. Therefore, the Fed will cut 1/4% most likely. That will send stocks, & probably silver & gold, up a day or two until all the enthusiasts sober up & remember that the world is still the world.

Of course, I would be an idiot to underestimate the idiocy & incompetence of any arrogant bureaucracy. After all, these are the same wonderful folks who gave us the Great Depression, & World War I & II. What can't they do wrong? Nothing. They could mess up a steel ball, which is one reason they are so cautious & timid & usually do what they believe the market expects.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Saturday, September 15, 2007

Will The Gold Price Correct Once More Between Now & November?

Gold Price Close Last Week : 704.30
Gold Price Close This Week: 709.60
Change: 5.30 or 0.8%

Silver Price Close Last Week : 1254
Silver Price Close This Week: 1254.4
Change: 0.40 cents or 0%

Notice that this week's commentary takes us from Monday though Friday, not Friday to Friday. Makes sense to do it that way, in light of the tumultuous week in metals.

Big question agitating GOLD & SILVER PRICES is whether the present gold price rally is "real", or the gold price will correct once more between now & November. Gold's performance Friday was not encouraging, bouncing off 717 to close only 2.20 above Thursday -- not quite a key reversal, but looking like a reversal anyway. One more push up & failure next week would put a cap on the gold price, & cinch a long correction bottoming in October-November.

The SILVER PRICE chart this week looks very different. It doesn't climb through the week, but made two attempts on 1276 & failed in both.

On the downside, closes below 685 and 1221 turn metals down. Upside gold must close over 720 for two days running, & silver must close over 1300. I view as very likely also a rise in the Gold/Silver Ratio to 60:1 before this "season of correction" ends.

Stocks hang over the cliff of one disaster, then another. It's like a bad silent movie serial. 'Twon't end well. A close below 13,125 falls quickly to 12,850, below which the trap door opens & the abyss yawns. Dow needs a close above 13,658 to convince anybody of anything. Next week should be a bad one. Swap stocks for silver & gold.

The US Dollar index has made new lows this week, & ended six down days in a row. Surely, surely the buck has fallen about as far as it will. Next big move will be a rally that takes all complacency by surprise & bashes its head into a wall. Buck still has no long term future, but every dog has his day, brief though it may be.

The DOW IN GOLD DOLLARS collapsed this week, dropping all the way to G$385 (18.624 oz). Not only has it dropped through support at G$415 & G$400, but it has also fallen through a major down-trend line. Listen, friends, to this most reliable indicator, for it warns, "Stocks are about to crash against gold." Against silver, too, no doubt.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Thursday, September 13, 2007

Gold Below 685 will Drop Lower, but as Long as It Holds Above 700 'Twill Keep Trending Higher

GOLD below 685 will drop lower, but as long as it holds above 700 'twill keep trending higher. SILVER held on above 1250, but the real mark to make remains 1300.

Alan "Greasy" Greenspan, who has learned to speak English since he left the Federal Reserve, admitted in an interview today that he "didn't really get it" that the sub-prime lending trend was significant enough to hurt the economy until very late 2005, but still defends his lowering interest rates from 2004, which, of course, caused the crisis in the first place.

If you have a sense of humour & a stomach that can digest three day old Chinese food, Greenspan's confession will bring tears of laughter to your eyes. If you're a normal human, it just brings tears. As my friend Catherine Fitts says, "These are not serious people." Either he's too dumb to be taken seriously, not knowing that puffing up the money supply with billions of bingo bucks would create a bubble somewhere, as every one who has ever studied monetary history knows (except of course, Federal Reserve & government economists), or he's too much a cynical, lying, time-serving, yellow-dog egg-sucking hypocrite to be taken seriously. Either way, Greenspan's not a serious person. Pitiable. Laughable. Ridiculous. Cruel. Lickspittle. All those, perhaps, but not serious, because serious persons question the consequences of their acts, & avoid acts that damage or kill innocent persons.

The US Dollar Index bounced up today, as I was expecting after a six day slide. Whether it's more than a bounce we will know after a few day's follow through. I don't think the dollar will drop through 78 on this trip, & am still looking for a rally, although it could well start from a lower springboard.

In stocks Dow 13,125 and 12,800 are the numbers to watch. Drop below the first brings a terrific rear-guard action at the second. Deny it as the gurus will, stocks are locked in a downtrend. Only a close above 13,700, followed closely by close above 14,000 would change the outlook, which is down, down, down. Swap stocks for silver & gold.

I was gazing at the chart of the US Dollar's value in Gold ounces today. Very instructive, & as much fun as writing these daily commentaries is, that chart shows how important it is to keep focussed on the long term. From 0.00394 troy ounce 3 September 1999 the buck has dropped to 0.00141 today. Wow. Aren't you glad you held on to US Dollars, & to stocks? And bonds? Don't you want to hold them longer?

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Wednesday, September 12, 2007

Gold Must Break Through 710, then 720 if it is to Run for 780

Whoo-ee! That US Dollar Index has painted quite a Niagra Falls on its chart the last six days. Pitiful, but probably somewhere near an end & turnaround. The outside & improbable outcome I've been looking over my shoulder for is a suddenly rallying dollar. It would really upset the apple cart for silver & gold & for stocks.

However, as the dollar's decline lengthens, a dollar rally becomes more and more probable, and less & less improbable. The Feb. 1992 Dollar Index low was 78.19, the only close below 80 in the last 37 years since Comrade Nixon disconnected the dollar from gold & put the whole world on floating exchange rates.

Wow. It's great to be part of history, huh? It's almost like being a galley slave at an oar on one of Nero's galleys.

SILVER has worked up to its 50 DMA (1256.9), made a 61.8% correction of its last fall, hit its 300 DMA (1271), and neared the upper downtrend line. What more can you ask? A clean breakout over 1300 the first day, continuing the climb the 2nd & 3rd days.

Stocks, having recovered a measley 46% of their fall at best, now struggle unsuccessfully to remain above 13,300. Watch the 12,800 level, next significant resistance. A Dow break below that number risks not a Niagra but an Angel Falls.

GOLD must break through 710, then 720 if it is to run for 780. A sudden jump to 720, back off to 700 or 690s, then another jump that fails to break 720 would be fatal. Any approach to 720 must break clean thru & keep on going. Gold simply has not yet made clear that its new rally has started, although since the last peak was 16 months ago, the time for another rally draweth nigh.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Tuesday, September 11, 2007

The Gold Price Could Run to $790 Very Fast

The GOLD PRICE rose US $7.90 today. For strength's sake it might have spent a few more days building under 710. If it crosses 720, the gold price could run all the way to 790 very fast. However, if a monster dollar rally hit it then, the gold price could retrace all of that gain and more, sending all the gold bugs back into the woodwork and putting a big "Finished" sign on this correction. Of course, that'll be just the time everyone will be screaming not to buy gold or silver. Or, gold could keep right on going up. You see, it's not simple.

The SILVER PRICE today, still lagging gold, reached a 68.2% correction of the fall from 24 July to 16 August (actually, 1263.5 on a closing basis). To confirm gold's move silver needs to push over 1300, really 1335. Credit crunch or not, the silver price makes me nervous about gold's rally.

Physical demand is huge right now, bigger than anything seen since the spring 2006 top, but premiums on physicals remain high. Message is that silver & gold prices will rise further. (I thought I'd just throw that little fact in there to add to your bewilderment.) Usually those physical premiums are a fairly reliable (60-75%) indicator of market direction.

Today the Dow surged -- isn't that the Bushite word?--to 180.54, but alas! without much effect on the Dow inGold Dollars (DiG$) which rose a mere one gold dollar, or about 1/20 of an ounce. I looked more closely at the Dow in Silver Ounces, too, and stocks have peaked against silver as well. Big drop coming in stocks.

The US Dollar Index is falling into new territory, below the last low and below the 80 mark, 38-year support. Surely, surely here somewhere it will turn and rally. Even without being managed it ought to do that. Biggest surprise for everyone right now piling into gold & out of stocks & dollars would be a massive, sudden rally in the US Dollar, taking all the shorts by surprise. Watch out -- things may not be as simple as they seem.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Friday, September 07, 2007

Silver Price is Lagging, While the Gold Price is Breaking Out - Something is not Quite Right

On Thursday & Friday I was out of town, so I thought I would try to catch y'all up today.

How markets behave against each other speaks volumes. Silver usually outperforms gold while confidence in financial assets (stocks) is rising, so let's ask, what is the rising Gold/Silver ratio telling us? Like the throb of tom-toms in a Tarzan movie, it's signalling bad juju for the stock market. Confirming that, the Dow in Gold Dollars has free-fallen the last two days. Once if fell through G$400 (19.50 oz) it shed another ounce (G$20.672) in two days. Wow. Very often I have said that the Dow in Gold Dollar is the most reliable indicator I follow, because it is. Right now it is screaming, "Get out of stocks!"

Things just go from bad to worse. Not only could the US Dollar Index not rally, it has now fallen to a new low, a low below the fatal 80 support level that for 38 years has held. I can't imagine the Nice Government Men allowing the dollar index to fall below 78, but maybe the day is shortly coming when they are powerless to stop it.

GOLD spoke out of both sides of its mouth today, rising 3.50, but still below 710. However, remember that gold has broken out above the downtrend line from the May 2006 peak. Yet that lagging silver keeps casting doubt on it. A big drop in stocks -- would it pull gold down, or send refugees fleeing into gold? At this point, I don't know. Last month gold followed stocks down. Future will become plain this week.

SILVER has just barely completed a 50% correction of its long drop, while gold is breaking out. Something's not quite right, like entering your living room & knowing something's wrong, something's been moved, but you're not sure what. To match gold, silver needs to close above 1300.

STOCKS look terrible. 200 Day moving average isn't far away at 12,922. 12,518 was the last low, & when that one is breached, the rats will be climbing over the sides of the ship like lemmings over a cliff. Look for massive down days. Swap stocks for silver & gold, now, while there's still 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"
http://the-moneychanger.com/

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.



Thursday, September 06, 2007

The Gold Price Broke Out Above its Downtrend Stretching Back to the May 2006 High

The GOLD PRICE broke out today above its downtrend line stretching back to the May 2006 high. This breakout must close higher tomorrow, & then exceed 710 to signal a genuine breakout & rally.

The SILVER PRICE has risen above its 17 day moving average, but remains below its 50, 200, & 300 DMAs, sign of a major correction.

The non-confirmation here is silver. For a real breakout and rally, silver and gold ought to line up. On the other hand, silver is climbing & could be simply lagging gold in this rally, as it sometimes does. Still, it's difficult for me to see a major metals rally beginning without the gold/silver ratio declining, or at least hand in hand strength.

The US Dollar Index hardly moved today. Yesterday the European Central Bank left its interest rate unchanged. Since markets widely expect the Federal Reserve to lower rates on 18 September at its next meeting, the unchanged Euro rate would give the Euro a price advantage that ought to force the dollar down. However, the heads of the major central banks meet monthly or six-weekly at the Bank for International Settlements in Basel for supper. Now, what do you suppose they talk about? Bass fishing? Nascar? Or how they will work together to fix exchange rates & keep their worthless currencies afloat? One guess -- only one.

Big break! Today the Dow in Gold Dollars (DiG$) dropped below G$400 (19.35 oz) to close at G$397.13 (19.211 oz). On the way up G$400 offered stiff resistance, so support awaits there now. However, on 15 August the DiG$ closed at the same spot, so on this second visit it will probably drop further tomorrow.

Stocks rose a piddlin' amount today, still unable to conquer 13,500. Y'all know now I'm changing my mind about stocks, well, about their nominal performance. After all, in a hyperinflation the Dow could go to 36,000, but whether it drops to 3,000 or rises to 36,000, here's the important point: against gold it will drop to two ounce to the Dow or less, & against silver to 18 ounces or less. Stop looking at the numbers & look at the realities. Swap stocks for silver & gold.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Wednesday, September 05, 2007

Gold and Siver Prices Need to Show More Strength to Call the Correction Finished

Just as yesterday confounded all the sublunary mathematicians who believe that stocks, metals, & the dollar must move opposite to each other, so today they were yet again bewildered. Stocks, metals, & the dollar all dropped together. So much for logic & formulas. Markets have their own minds, and their mouths address only humility.

The SILVER PRICE bounced off the 1225 - 1235 resistance area, but held on at 1218. One scratcheth one's head, wondering why silver laggeth so, when physical demand remains so strong. Silver must cross 1300 to claim another rally. We watch.

The GOLD PRICE, not very surprisingly, bounced off the downtrend line it was trying to penetrate. That's not defeat, yet. Gold needs a large breakout to convince, over 710. If it drops below 666, it will fall down through support and through the bottom of an equilateral triangle.

If I am talking out of both sides of my mouth, it's because I'm thinking out of both ears, tugged in two directions. I just can't see enough strength in the metals yet to call the correction finished, but breakouts above 1300 & 710 would change my mind.

The Dow hit its 50 day moving average yesterday & bounced off, stymied. That can mean one of 2 things: First, it has failed to penetrate the 50 DMA, & so will fall much further, or Second, it only bounced off the 50 DMA to touch back to the place it broke through the downtrend line, preparing to blast off upwards. That leaves us waiting to see whether the Dow can close above 13,500 & rally more, or whether it closes below 13,050 for another long tumble. Me it doesn't bother, because I advocate swapping stocks for silver & gold, allowing other people to have the enjoyment of losing their capital in stocks.

The US Dollar Index took a blow to the head today, falling over 25 basis points. The buck seems slowly stumbling its way into a rally. It will be okay as long as it keeps above 80.441. Today & yesterday it bounced off its 50 DMA, but that's normal on the first try, so give it 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"
http://the-moneychanger.com/

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.



Can't See Enough Strength in The Metals Yet to Call the Correction Finished

Just as yesterday confounded all the sublunary mathematicians who believe that stocks, metals, & the dollar must move opposite to each other, so today they were yet again bewildered. Stocks, metals, & the dollar all dropped together. So much for logic & formulas. Markets have their own minds, and their mouths address only humility.

SILVER bounced off the 1225 - 1235 resistance area, but held on at 1218. One scratcheth one's head, wondering why silver laggeth so, when physical demand remains so strong. Silver must cross 1300 to claim another rally. We watch.

GOLD, not very surprisingly, bounced off the downtrend line it was trying to penetrate. That's not defeat, yet. Gold needs a large breakout to convince, over 710. If it drops below 666, it will fall down through support and through the bottom of an equilateral triangle.

If I am talking out of both sides of my mouth, it's because I'm thinking out of both ears, tugged in two directions. I just can't see enough strength in the metals yet to call the correction finished, but breakouts above 1300 & 710 would change my mind.

The Dow hit its 50 day moving average yesterday & bounced off, stymied. That can mean one of 2 things: First, it has failed to penetrate the 50 DMA, & so will fall much further, or Second, it only bounced off the 50 DMA to touch back to the place it broke through the downtrend line, preparing to blast off upwards. That leaves us waiting to see whether the Dow can close above 13,500 & rally more, or whether it closes below 13,050 for another long tumble. Me it doesn't bother, because I advocate swapping stocks for silver & gold, allowing other people to have the enjoyment of losing their capital in stocks.

The US Dollar Index took a blow to the head today, falling over 25 basis points. The buck seems slowly stumbling its way into a rally. It will be okay as long as it keeps above 80.441. Today & yesterday it bounced off its 50 DMA, but that's normal on the first try, so give it 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"
http://the-moneychanger.com/

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.



Tuesday, September 04, 2007

Gold Price Needs to Close Above 710 to Prove it has Turned Up Into a Rally

The GOLD PRICE broke out Friday from its short term downtrend but needs to close above 710 to prove it has turned up into a rally. Without that over-710 close, gold is still liable to see lower prices between now & November.

Both silver & gold prices are reacting against their recent drops, & such reactions (the "B" wave of an A-B-C down-up-down correction) can appear as strong as rallies. But since we have no crystal ball, we have to buy-and-hope sometimes. Whether we saw the silver & gold price lows in August, or we will see them between now & November I don't know, but sometime here y'all had better be buying silver & gold.

SILVER PRICES jumped up today, but remember that a rally to 1241 would only mark a 50% correction of the recent fall. Resistance stands at 1225-1235, & to close above the downtrend line silver needs to close over 1300.

I know that the August drop brought in hordes of silver buyers because premiums have risen on every form of silver, & supply shortages & delays have appeared. That points to stupendous strength.

The GOLD/SILVER RATIO has not yet during this correction reached even 57.50, let alone the 60.00 I have suspected we would see. Swap gold for silver if the ratio reaches 59:1.

What a great time to be a silver & gold investor! The bottom of this correction will mark the first major correction of this bull market. Once this correction ends, the most powerful, most violent, longest upwave will begin that will smash through $25 for silver & $1,000 for gold.

If you are to survive the barrage of government & Federal Reserve lies aimed at keeping you in their trap & picking your bones clean, you must keep your eyes on the horizon -- the long term. Coming out of the subprime liquidity crisis, Bush, Bernanke, & Paulson will keep pouring in new money & drugging you with pronouncements that the "economy is sound." They are desperately trying to keep up housing prices & stocks, but both will continue to lose value against silver & gold, even if they appear to gain in nominal dollar terms.

Here's an example: stocks topped at 11,722 in January 2000, went down nearly to 7,500, then rose to 14,000 in July 2007. What profited the gain? In inflation adjusted terms, 14,000 only equaled 2000's 11,722. Against gold & silver, the Dow dropped more than 50% in that time. Real estate has also dropped against metals. So, friends, keep your eyes off the bait & on the hook.

Today the Dow made its second day close through its 50 day moving average (13,4452.93) and above its downtrend line. Target? 13,695, the last high. Advice? Swap stocks for silver & gold, now.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.