Thursday, June 05, 2008

Can the Silver Price Pull the Gold Price Up?

Gold Price Close Today : 871.80
Gold Price Close Yesterday: 879.9
Change: -8.10 or -0.9%

Silver Price Close Today : 17.137
Silver Price Close Yesterday: 16.906
Change: 23.1 cents or 1.4%

US Dollar Index Today: 73.05
US Dollar Index Yesterday: 73.46
Change: -0.41 or -0.6%%

When gold and silver prices go opposite directions one day, it's a flop. Two days, and it's a phenomenon.

The GOLD PRICE sank US$8.10 today. Sounds terrible, huh? Maybe, but not when the SILVER PRICE rises 23.10 cents and then closes over $17.00 at $17.137.

The Gold/Silver Ratio dropped a colossal 117.4 basis points. Wait a minute! What does this mean? Well, the silver price 50 Day Moving Average (DMA) stands at $17.34, and if the silver price can get through that, it means that the Gold/Silver ratio is signaling an upmove in silver and gold prices.

Give it another day to tell the whole story -- see if the silver price can pull the gold price up. Looks very encouraging to me. More I think about it, the more appealing silver and gold look at these prices.

Shut your ears to the croakers and sirens, tie yourself to the mast, and sail full speed ahead.

The US DOLLAR INDEX failed again today at 73.50, falling back over 40 basis points. Chart looks like an avalanche off Mt. Everest. Dollar reached 73.89, then the snow fell off the mountainside. This repeated weakness -- one day strong, one day weak -- makes me wonder if the dollar has a rally in it or not. Here is the most important thing you must hear from me, if you hear nothing else: get out of US dollars. Swap them for silver and gold preferably, but whatever you get, get out of dollars.

Stocks (basis Dow) rose 213.97 points today, while the S&P500 rose 26.85. Ask me if I'm impressed -- no, wait, I'll answer that before you ask me: no, I am not. Dow would have to rise through 12,700, and then 13,150 to impress me.

Caroline update: Because of her strep throat, Caroline's heart surgery has been postponed at least two weeks. Thanks for your continuing prayers.

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.