Monday, January 28, 2008

Clearly, Silver and Gold Prices Have Broken Out of Their Corrections for a New Leg Up

Gold Price Close Today : 927.10
Gold Price Close 12th of January: 880.80
Change: 46.30 or 5.3%

Silver Price Close Today : 16.69
Silver Price Close 12th of January: 16.138
Change: 55.2 cents or 3.4%

US Dollar Index Today: 75.566
US Dollar Index Close 12th of January: 76.384
Change: -0.818 or -1.1%

Since I was traveling Friday and missed sending a commentary, I'm giving y'all a weekly summary today.

Clearly, SILVER AND GOLD PRICES have broken out of their corrections for a new leg up. The gold price decisively smashed the $915 resistance today. The silver price smashed $15.50 long ago, & now $16.30.

Figuring targets from here is tricky business -- new territory. Silver could add $5 from here, or even reach $24. Don't waste your breath calling me crazy, I'm just reading a chart.

Till now the gold/silver ratio has been remaining remarkably steady. It's about time for the silver price to put on that famous overdrive that it usually kicks in late in a gold rally. The gold price seems fated to hit $1,000. On a spike (who knows?) it could reach $1,100 or $1,200.

The US DOLLAR looks terrible and can't hold on above 76, but against it the [even sorrier] euro begins to hint at topping. Political pressure must be mounting on Euro central bank to lower rates, & in today's world, politics always trumps good sense.

Silver shows a strong seasonal pattern to top in mid-February while gold shows a similar but much weaker tendency. Rally has several weeks to run. Volatility will be fierce.

I am still buying silver & gold.

It looks like the whole world is flying apart, but remember what a friend of mine once told me, a factor that works strongly against collapses: Every morning 5 billion people get up thinking, "How am I going to make things work out today" instead of "What am I going to do when everything collapses."

Most likely stocks made an interim bottom last week, from which they will stage a rally. From our standpoint, only purpose of that rally is to shed whatever stocks you still hold, and to put the proceeds into silver & gold.

I prove my argument -- that stocks are in a long term (15-20 year) bear market against metals by pointing to the trend of the last 7 years, wherein the Dow has lost more than 65% of its value against silver & gold. More than two- thirds, but this is far from finished. Stocks will continue to drop against gold from the present 13.36 oz to 2 oz or less. Against silver, stocks will drop from the 742 oz. presently needed to buy the Dow to somewhere under 50 oz. Don't fight that tide.

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.