Thursday, March 20, 2008

As Suddenly as it Blew in, this Correction Will Pass and the Silver and Gold Price Rally will Resume.

Gold Price Close Today : 919.60
Gold Price Close 14th of March: 998.10
Change: -78.50 or -7.9%

Silver Price Close Today : 16.805
Silver Price Close 14th of March : 20.575
Change: -3.77 or -18.3%

US Dollar Index Today: 71.649
US Dollar Index 14th of March: 72.764
Change: 1.15 or 1.6%

Wow. It was Goetterdaemmerung in gold & silver markets today, but of that more further down.

Don't ever confuse short term market moves with primary trends. The primary trend is that one that lasts 15 or 20 years, the tide of investment trends. You must never try to launch your investment boat against that tide. For silver & gold prices, that primary trend is up; for stocks & the dollar, down. What you are seeing is a short term reaction against over-wide pendulum swings of that trend. The primary trends will shortly re-assert themselves.

The GOLD PRICE fell another $25 today and the SILVER PRICE another $1.59, to $16.808 and US$919.60. The gold price falling to support at $925-$918 was no surprise. It could fall as low as $880, even $840, but I don't expect that. The fall so far has retraced 23.85% of the rise from $652.70 -- enough to complete a correction, conceivably.

The silver price has already retraced 42.7% of its move from $11.489 to $20.688, as of today's aftermarket at $16.76. Low today was $16.50. These corrections have been deeper than I expected (no surprise to y'all), but have fallen enough to make a bottom. Generally these sharp falls in gold and silver prices end within a few days.

Strange is that I feel like an alien from outer space watching this. Most people will be reading this as the end of silver & gold's rally from last August, but I just can't buy that. Why has the gold/silver ratio not troughed? That just doesn't fit, that price peaks would occur in silver and gold prices without the ratio reaching a new low. As suddenly as it blew in, this correction will pass and the silver and gold price rally will resume.

Business was wild as a drunk orang-utan today -- covered up with calls, almost all buying, buying. Physical demand is huge here, and I hear the same from other dealers. I may be crazy as a Betsy bug, but I would still be buying silver & gold.

STOCKS today rose 262 points to close at 12,361.32. That brings them to the (roughly) 13,400 level where the Dow has failed several times before. IF stocks can clear that hurdle, the 12,700 barrier (neckline of the head & shoulders topping formation) stands above, ready to stymie all comers. I'm guessing stocks will rally up to that point before they fail. Remain confident that the US economy's problems -- and stocks primary down trend or bear market -- have not been fixed by dropping interest rates & buying out/off a failed investment bank (Bear Stearns). O, have mercy.

Surely the press & the Establishment treat us like mushrooms. Who could believe such foolery? Only government-school-brainwashed Americans.

Then there is the US Dollar, where we are being asked to believe the monetary equivalent of "anvils fly upward when dropped because we have suspended the law of gravity by congressional act." Nonetheless, even a blind hog finds an acorn now & then, & we knew the dollar was in for a rally. Somehow, I don't believe this is "the big one" just yet.

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 $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.