Wednesday, February 27, 2008

This Rally in Gold and Silver has at Least Another 8 Weeks to Run

Gold Price Close Today : 946.10
Gold Price Close Yesterday : 937.60
Change: 8.50 or 0.9%

Silver Price Close Today : 18.720
Silver Price Close Yesterday : 18.080
Change: 63.5 cents or 3.5%

US Dollar Index Today: 74.64
US Dollar Index Yesterday: 75.50
Change: -0.88 or -1.2%

The SILVER PRICE moved clean through $17.00 in nine days. In three days it has moved 3/4 of the way through the $18.00s, up 63.5 cents today to close at $18.72, another new high. But the GOLD PRICE stopped at $946.10, its last high.

How can I possibly think this is not the top? How can I keep insisting the silver price will reach $21.00?

Simple. Look at the Gold/Silver Ratio. It dropped 1.305 to 50.54 today, about 2.5%, largest single day drop I remember. But it has much further to drop. 50:1 is only the first major resistance for the ratio. Before us still lies 46, the 2006 low at 43.6, and lower still to make a new low.

If y'all could see y'all would understand that the ratio is locked into an unyielding, grinding primary downtrend that makes signature spike lows. This rally in gold and silver, which is always a plunge in the ratio, has at least another 8 weeks to run, unless that ratio drops even faster than it has in the last two lows.

US DOLLAR INDEX is helping the silver price as much as possible, dropping 88 basis points today to shave its previous low. Don't think the dollar will drop through this low. Expect it to hold.

STOCKS have fallen to a new low against silver. Whoooo.

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.