Monday, February 11, 2008

Silver and Gold Prices Break Out Upside Against the Competing Fiat National Currencies

Gold Price Close Today : 922.90
Gold Price Close Yesterday : 918.40
Change: 4.50 or 0.5%

Silver Price Close Today : 17.433
Silver Price Close Yesterday : 17.075
Change: 35.8 cents or 2.1%

US Dollar Index Today: 76.56
US Dollar Index Yesterday: 76.651
Change: -0.09 or 10.1%

The SILVER PRICE has tired of dawdling & is now adding 35 cents a day. I believe it is safe to say we are moving into the latter stage of the rally when the move becomes the steepest & wildest. From here the silver price should climb above $21. Still time to buy silver.

The silver price has broken out, but the GOLD PRICE now must beat its way back through $930, where it stalled before. Relax, this will happen, & probably this week. Sometime later we will want to hedge our gold bets, but not yet, not yet by a long shot.

US DOLLAR INDEX bid fair last week to rally, but in the past few days is staggering again. Frustrating, but unlikely to fall sharply now.

My friend Supertechnician RL on Saturday called my attention to breakouts in silver & gold prices on the charts priced in euros. The euro charts have been the most consistent & easiest to read for some time. Gold Prices have also broken out upside against the Yen, while silver has broken out in Euros & is hammering on the ceiling in Yen.

Now think about it: what does it mean when the alternative currencies silver & gold prices break out upside against the competing fiat national currencies? It means that the "realizers," the folks alertly watching warning signs of the global equivalent of a bar fight, have begun to edge toward the doors. I hope y'all aren't just reading these commentaries. I hope y'all are acting on them.

By the way, later this year we'll see the big correction of this rally, & all the goofs who work on Wall Street & in the media will be blabbering about the "death of gold." Forget that rot & hold on, because those corrections will have begun from much higher silver and gold prices than we now see.

Merciful heavens! Look at that platinum price, up a choking 46 bucks today! Because industrial demand drives platinum, and its cost in end products usually amounts to only a small percentage of the total cost (a catalytic converter in a car, for example), demand for it is inelastic (stiff) to price. That is, rather than shut down the auto assembly line for want of catalytic converters, automobile makers will pay up for platinum. However, over the not-too-long term, when the price keeps on rising, they will begin casting about for near substitutes: palladium.

Whenever you see a stupid impasse like this, what's the first thing you think? I'll bet the government is behind this somehow or other. You'd be right, here, too, because it is government mandated catalytic converters that use huge amounts of platinum (& palladium).

Good thing about my Percherons is that they don't need a drop of platinum or palladium, or a catalytic converter, or a government bureaucrat to tell me how to use 'em. You just put hay in one end, say "Gee!" and "Haw!" & fully recyclable fertilizer comes out the other end. Beat that, Detroit!

But I have strayed from my subject, markets. Let us return . . .

Would somebody explain to me what good the Dow is doing losing 64.87 points one day and gaining 57.56 the next? This ain't the royal road to riches, folks. Get out of stocks fast.

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.