Tuesday, March 04, 2008

Was Yesterday the Silver and Gold Price High?

Gold Price Close Today : 963.90
Gold Price Close Yesterday : 981.50
Change: -17.6 or -1.8%

Silver Price Close Today : 19.738
Silver Price Close Yesterday : 20.073
Change: -33.5 cents or -1.7%

US Dollar Index Today: 73.71
US Dollar Index Yesterday: 73.72
Change: -0.01 or 0%

Volatility struck today. After the SILVER PRICE hit a high of $20.56 and the GOLD PRICE $988 early in the day, the bottom dropped out (so to speak in exaggeration). The silver price dropped as low at $19.50, but hungry bargain buyers quickly ran it up for a close at $19.738. The gold price hit a low of US$956.10 before settling at $963.90, down US$17.60. Nothing much to scare the horses in all that, just volatility to be expected after unbroken days of large run-ups.

But that wasn't what caught my eye. Most interesting outcome of the day was the drop in the gold/silver ratio in the teeth of dropping silver and gold prices, the ratio dropped -0.062 to 48.83. That whispers that silver is stronger than a garlic milkshake right now, so don't step in its way.

On a more sober note, how could we tell if yesterday was the price high and today the first break? Simply enough, as the silver price recovers it will trade right up to yesterday's close ($20.073) or a little higher, then fail. How do we tell the difference? Wait & watch. Meanwhile, that strength in the Gold/Silver Ratio argues that the end is not yet.

Neither the US DOLLAR INDEX nor Stocks (as proxied by the DOW) did anything but continue to bleed slightly today, slipping nearer and nearer critical support.

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.