Friday, June 13, 2008

Don't Look for New Lows in Silver or Gold Prices

Gold Price Close Today : 870.30
Gold Price Close 6th of June: 895.40
Change: -25.10 or -2.8%

Silver Price Close Today : 16.54
Silver Price Close 6th of June: 17.397
Change: -85.70 cents or -4.9%

US Dollar Index Today: 74.040
US Dollar Index 6th of June: 72.351
Change: 1.689 or 2.3%

Man, I hate weekends. Oh, not because they're weekends, but because governments always throw "surprise parties" over the weekend. Since Adolf Hitler governments have waited until the weekend to have "conferences" and "central bank meetings" and then they make some goof-ball announcement on Sunday, when nobody can get to a market to hedge positions, so on Monday markets go crazy. This weekend several of these meetings are going on, and the toothless warriors of the Bushite Administration -- Gentle Ben Bernanke and Hank the Heister Paulson -- have been rattling their rusty dollar sabers, touting a stronger dollar and threatening any country that doesn't line up with their plans.

Large prospect of a surprise party on Monday. Of course, the job of every analyst is to pierce the curtain of hogwash and less dainty stuff that beclouds the air to see what government apparatchiki really mean, and what their actions are really liable to accomplish. In a word, nothing and nothing. Let's not belabour things more than needful.

Oh, yes, Oh, yes, the dollar may rise a short while on their blast of hot air, but the gravity of reality will eventually bring it back down. The worst mistake you could make right now is to believe that the dollar is about to strengthen. Don't believe it. Rather, regardless any small rally the buck experiences, it is inexorably sliding toward the graveyard of all fiat currencies: nothingness.

Now to this week's markets.

The drop in SILVER and GOLD PRICES for the week looks horrifying, but in fact wasn't so bad. Today again the silver price dropped nearly to $16.20 (1624) but climbed and closed above $16.45 again, gained 8 cents in fact. Silver's failure to break down under what must have been a tidal wave of rallying-dollar-induced selling looks very strong.

Don't look for new lows in silver or gold. Those lows occurred after the crash that bottomed on 1 May. Now we have entered a frustrating, volatile narrow triangle that will nail the most seasoned trader. Just be patient, buy on any declines. "Must hold" levels are $16.45 and $867. Breakouts come above $18.24 and $925. In between, we suffer.

The US DOLLAR INDEX finally (today) broke through 73.50 and 74.00 to close at 74.04. This forecasts a rally that could reach as high as 77, and last 2 - 3 months. Use this as a heaven-sent opportunity to get out of dollars and into silver and gold. A rising dollar will create resistance for silver and gold, but only resistance. That will be overcome shortly. Oil on the other hand is much more vulnerable.

STOCKS dropped only slightly this week, belying their true weakness. The next Dow flirtation with 12,000 will probably fall through. Sell stocks and put the proceeds in silver and gold.

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.