Tuesday, March 18, 2008

Silver and Gold Price Rally is Not Over Yet - A Spectacular Move is Yet to Come

Gold Price Close Today : 1003.20
Gold Price Close Yesterday: 1001.4
Change: 1.8 or 0.2%

Silver Price Close Today : 19.890
Silver Price Close Yesterday : 20.22
Change: -33.2 cents or -1.6%

US Dollar Index Today: 71.94
US Dollar Index Yesterday: 71.44
Change: 0.5 or 0.7%

The Fed announced that it was lowering its interest rate by 3/4 of a percent, on top of a 1/4% drop Sunday, making the dollar earn that much less and become that much less valuable. Markets responded by buying [that's not a misprint] dollars and the buck rose 50 basis points. Welcome to Cloud Cuckoo Land!

After the deadly announcement SILVER and GOLD PRICES dropped fast. The gold price hit $976.30 and the silver price hit $19.47, but now they are trading at $983 & $19.74. This begins begin a correction that lasts 3 to 8 days. Shouldn't drop much lower than already seen, maybe one more scary drop tomorrow, and that's the end of it. Take this home: the silver and gold price rally is not over yet, and a spectacular move is yet to come.

I have updated the long-term gold price and silver price targets beneath my posts below. Figure that the 2006 gold price high at $720 roughly equals the 195.50 high in December 1974. From that high the gold price increased 434.8% to $850 in 1980, so if the gold price increased 434.8% from $720, it will reach $3,130.56.

If the silver price tops when the Gold/Silver Ratio reaches 16:1 (as I expect), then that yields a silver price target of ($3,130.56/16) or $195.66/oz.

Meanwhile, back on Wall Street & in Washington, the Mystick Monks of the Federal Reserve Monetary Shrine announced a 75 basis point interest rate cut, accompanied by announcements of better-than-forecast earnings at Goldman Sachs & Lehman. Listen to this: Goldman rose 16% on news that its net net income fell only $3.23 a share, and Lehman's income fell only 82 cents a share. Wow. That's sure the kind of investment I want to load up on.

All this good news sent the Dow up 420 points, only about 300 points from where it broke down below the head & shoulders topping formation neckline. Do you laugh or puke at all this? Wall Street, assisted by its accomplice in crime, the federal government and Fed, robs the public & shifts off its losses on the taxpayer, then announces in sanctimonious tones that its public benefaction has assuaged the crisis - all to the sound of self-congratulating applause. Mercy! Thank the murderers for cleaning up the corpse!

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.