Wednesday, April 16, 2008

Gold and Silver Broke Out Upside

Gold Price Close Today : 945.10
Gold Price Close Yesterday: 928.70
Change: 16.40 or 1.8%

Silver Price Close Today : 18.305
Silver Price Close Yesterday: 17.830
Change: 47.5 cents or 2.7%

US Dollar Index Today: 71.42
US Dollar Index Yesterday: 72.02
Change: -0.60 or -0.8%

In a fallen world, Murphy's law rules, so it came as no surprise that yesterday, when for the first time ever I didn't comment closely on the markets, turned out to be the day before gold and silver broke out upside. 'Twas okay, because I had been warning y'all it was going to happen. Y'all had plenty of time to buy.

The GOLD PRICE breakout today took it above its last high close, over its 50 day moving average ($939.41), and the $925-$930 resistance. It has traced out a series of higher highs, and higher lows. My friend Bob L. called today all excited and said that as long as the gold price gets over $980 it will take off. Certainly US$1,000 will be a tough mountain to climb, but remember, I have been expecting the rally to resume. Here 'tis.

While the gold price climbed 1.8% today, the silver price leapt 2.7%. That takes it 1.5 points from crossing over its 50 DMA, and in position to o'erleap the 50% correction of the last fall, $18.715. This looks like the silver price broke out of a flat-topped triangle. Trouble will come around $19.30, although $18.50 or so will offer minor roadblocks. If the silver price gets through $19.30 and $21.30, look out.

What happens if the gold price fails at $980 and silver at $19.30? Then a big correction follows that takes gold back to 800 bucks. However, that is not what I expect. Rather, I am looking for silver and gold prices to extend their rallies that began last August. We're back in business.

This morning I heard on National Pretend Radio (NPR) that the dollar had made a new all time low, against the Euro, but the Dollar Index did not follow. What an exquisite joke! The sorry-good-for-nothing fiat Euro -- even less backed by gold than the US Dollar and racked by inward tensions (Spain and Italy are trying hard to stage their own mortgage collapse and depression) that will blow it apart -- is slapping the once-almighty-but-now-sorry-good-for-nothing Dollar around the block.

Dollar's not as bad as the Euro, in fact, and looks ready for a turnaround to me. This last gasp weakness (topping Euro strength) helps silver and gold, though.

The Dow closed up 260 points today, making another in a series of higher lows -- in other words, an uptrend. However, STOCKS have been blocked thrice already at about 12,750. More times a market knocks on a resistance area, more likely it is to break through. Maybe this time for stocks. That said, stay out of stocks. Stocks are in a long term bear market and will keep on losing value against silver and gold. Sell stocks and put proceeds into metals.

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.