Wednesday, April 02, 2008

Was Yesterday the Last Day of the Silver and Gold Price Correction?

Gold Price Close Today : 895.20
Gold Price Close Yesterday: 882.90
Change: 12.3 or 1.4%

Silver Price Close Today : 17.147
Silver Price Close Yesteday: 16.855
Change: 29.2 cents or 1.7%

US Dollar Index Today: 72.23
US Dollar Index Yesterday: 72.51
Change: -0.29 or -0.4%

The good news about SILVER and GOLD PRICES today did not stop with their higher closes, gold up $12.30 at $895.20 and silver up 29.2 cents at $17.1470. No, in the aftermarket they kept on chugging, running to $904 and $17.375 last I saw. Yesterday might have been the last day of the correction, but let's look at tomorrow, too. I note with interest that the upward correction (against the primary down trend) in the DOW IN GOLD DOLLARS appears completed, or nearly so.

I have to stand by my view that this is a short term metals correction. Once it ends, in the next few days or already, the next leg of the metals rally will begin, taking silver and gold prices much, much higher than they have already been. If the silver and gold price correction has ended, tomorrow the gold price ought to close above $925, and above the 50 DMA at 939.87 would be even better. Silver needs to close above its 50 DMA at $18.12. Higher would be better.

The US DOLLAR INDEX today dropped back below its 20 day moving average (72.31). This remains equivocal, but a close below 71.30 would drag the dollar much further down. The Dollar Index needs to climb above its last intraday high at 73.19 before it attracts any realistic believers.

In STOCKS, the Dow Jones Industrial average gave back 45 points today. Since 10 March it has been trending upward (higher highs, lower lows), but must clear that 12,700 (& more precisely, 12,750) neckline before a sizeable rally will follow. We'll know by end of the week, I think. Stay out of stocks. Swap stocks for silver & gold.

On this day in 1792 the US congress passed the Coinage Act, which (under the Constitution's authority) forever & immutably set the standard "dollar" at 371.25 grains of fine silver. The Act provide for no gold coins denominated in "dollars", but only Eagles, Half Eagles, and Quarter Eagles valued at $10, $5, & $2.50, establishing a "symmetallic" & not a bimetallic or monometallic standard.

The system was most astutely designed to allow a permanent silver dollar coin as the basis of the currency, with periodic adjustments of the gold coinage to allow for the change in the gold/silver ratio value at market. This was actually done in the 1830s without cheating a single member of the public.

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.