Monday, February 04, 2008

The Gold Price Made a Perfect Reverse Head & Shoulders Bottom Today as Did the Silver Price

Gold Price Close Today : 904.90
Gold Price Close Friday : 908.70
Change: -3.80 or -0.4%

Silver Price Close Today : 1674
Silver Price Close Friday : 1682.4
Change: -8.4 cents or -0.5%

US Dollar Index Today: 75.34
US Dollar Index Friday: 75.484
Change: -0.14 or -0.2%

The SILVER PRICE today made a perfect reverse head and shoulders bottom at $16.40 (the head) and 1650 & 1660 (the shoulders). The silver price should punch through $17 tomorrow or Wednesday for much higher silver prices this week. There's still time for y'all to buy silver -- three to seven years left on this bull market.

The GOLD PRICE also made a perfect reverse head & shoulders bottom today with a low at 891.60. Observe closely also that the gold price closed down today only $3.80, & above US$900. You are watching a reaction off US$930, preparing to attack $930 again -- not over, not over, not over yet. Remember from last rounds that US$915 is the gold price to beat.

I have not remarked the spectacular PLATINUM PRICE performance, but today it reached US$1,800.50. PALLADIUM PRICE, platinum's poor cousin, must move in tandem with platinum because it is a substitute for platinum in many uses. Until lately palladium prices had not moved as much as platinum prices, but now is beginning to play catch up, with a US$427 high today & US$418 close.

Roughly 3/4 Platinum supply comes from southern Africa, South Africa & Zimbabwe, while 1/4 comes from Russia. Palladium supply is just the opposite. Russians controlling the palladium marketing makes projecting a price near impossible, & they work the market cleverly, to their own advantage. Look for much higher prices in both metals, especially now that South Africa has announced another triumph of socialism in the failure of its electric generation industry to keep up. That has caused rationing to gold & platinum mines there. Brilliant stroke, central planners! Having failed to build new generating capacity, the problem now will last until 2012.

Sometime you have to wonder if government isn't too high a price to pay to prevent anarchy.

When a declining market fails to drop on bad news, it's usually a bullish sign (or bearish sign when a rising market fails to advance on good news).

Now apply that to the US Dollar. The last two weeks have slammed the dollar with more bad news than anyone could have predicted, including a 1.25% Fed interest rate drop, but it has failed to reach to new lows, while the Euro has failed to go to new highs. That hints that the dollar has made its low for a while, & is slowly building a base for a rally later this year. Won't be much of a rally, but a rally still.

STOCKS fell back today, but not enough to change any outlook. Day by day it becomes more pressing for y'all to swap stocks for silver & gold. Time is running out.

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.