Tuesday, June 03, 2008

Silver and Gold Prices Will Be Volatile in the Next Few Weeks While They are Proving They Have Bottomed

Gold Price Close Today : 881.60
Change: -11.30 or -1.3%

Silver Price Close Today : 16.799
Change: 7.5 cents or -0.4%

US Dollar Index Today: 73.30
Change: 0.35 or 0.5%

Sorry I missed y'all yesterday, but I had to drive way down into Mississippi (Laurel) to pick up some Large Black Pigs. They are a rare breed, probably only 1,000 in the US. Foot & mouth in England took a heavy toll on them. They have big floppy ears and a disposition gentle as a dog -- altogether amazing pigs. (Y'all can see that I am investing in pork as well as silver.)

Confusion and bewilderment reign in markets today. The "rising dollar" (sounds like a contradiction in terms) has cast them all into confusion. Stocks, gold, silver, oil, all dropped today. O, Woe! What will become of us?

We'll probably survive, since the dollar won't rise for long, and silver and gold prices should speedily shrug off whatever evil spell a rising dollar might at first cast over them.

STOCKS (measured by the Dow) appears to have ended their upward movement for the summer. Okay, maybe, maybe they have one more spike up, but that's looking less & less likely. Anyway, we are cheerfully out of stocks, having sold them and put the proceeds in silver and gold.

The US DOLLAR INDEX has now climbed above its 50 day moving average (today 72.45) and the middle of its Bollinger band. The bandy-legged buck seems to have tied on its running shoes, what-ho! Technically it needs to climb and close over 73.50 first. Ultimate target is 75 to 75.50. Before you let this cast you down, remember that the dollar is not merely the mirror image of silver and gold so that when one goes up the other goes down. True, a rising Samolean will cause some trouble for the metals at first. However, this is (1) the time of year when they seasonally make lows anyway, and (2) at the end of a large correction. Therefore metals are weak anyway, so a rising dollar looks stronger, and metals weaker, than they otherwise would. Just hold your cards in patience, and take this opportunity to swap US dollars for silver and gold.

Remember, when everybody else is panicking, it's time for the cool-headed to buy.

SILVER and GOLD PRICES are not going to be much fun to follow for the next few weeks. It will be a volatile up and down while they prove that they have indeed bottomed (as I suspect) or go lower to make lower lows (which I doubt). But it's time like these, when everyone is cringing and talking about "the end of the bull market" that the wise will buy, knowing that it is only a normal correction.

It's just like a battle -- when the bullets start flying, the tough get going, and the not-tough run. Keep your heads. Silver and gold prices have years yet to run up.

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.