Friday, August 01, 2008

Silver and Gold Prices to Begin a Powerful Move that Will Lift Gold to US$1,300 or More and take Silver as High as $34

Gold Price Close Today : 909.00
Gold Price Close Yesterday : 913.90
Change: -4.90 or -0.5%

Silver Price Close Today : 17.481
Silver Price Close Yesterday : 17.750
Change: -26.9 cents or -1.5%

US Dollar Index Today: 73.39
US Dollar Index Yesterday: 73.22
Change: 0.17 or 0.2%

WOW. Look at the SILVER PRICE Chart for the last three months, below. Look at this past week's activity, a beautiful plunge to a low of $16.84 on Wednesday and a near-touch of the 200 day moving average, followed by a sharp upward rebound & close above the 50 day moving average. Strong as a garlic milkshake. Yes, it fell today but not significantly and not back into the bottoming range, although a bit below the 50 DMA.

Even as the GOLD PRICE fell off today (by $4.90 to $909) it remained above that US$905 support. Good, good. I think we saw the bottom of this correction on Wednesday, although August may largely be spent moving sideways and only slightly higher. Sometime toward month end I expect silver & gold to begin a powerful move that will lift gold to US$1,300 or more and take silver as high as $34.00.

Big story today was platinum's US$100 drop. Suddenly everybody in the platinum market was seized by fear of poor US car maker sales, a switch to smaller vehicles, & therefore, less platinum use in catalytic converters -- or so the news stories run. Clearly, there were stops just under $1,700 that were triggered into a waterfall.

Likewise, platinum's fall will trigger the waterfalls of denunciations from pundits who say deflation, rather than inflation, lies in store. I respectfully recommend -- you ignore them. Last week the US House of [Mis]Representatives passed a huge bail-out bill for the mortgage & home building industry. Hasn't passed yet, but some version of it will, for all the scoundrels, jackals, & vultures who precipitated the subprime crisis must now be allowed to dip their snouts in the taxpayers' blood yet again. What a great country, where everybody [who is somebody] gets a second chance!

All the stock indices fell today, not a good sign. Sort of like going out in the morning to find buzzards roosting on your front porch. Stock markets continue to burn up buying power without really advancing. This little rally seems doomed to sputter out by end-August latest.

The US DOLLAR INDEX rose this week over 50 basis points, to climb over 73 & perhaps take another shot at 74.30, June's high. Logically a market that has been down so long ought to make at least a feeble rally, but the dollar can't even do that. I allow for the possibility of a rally, but it won't go far and won't change the primary trend, or hurt silver or gold much.

Many thanks for your prayers for my wife, Susan. Her cardiologist gave her some medicine yesterday that allows her to sleep without coughing or smothering, so last night she could rest. Her mitral valve replacement surgery is scheduled for 26 August, and we both deeply appreciate your prayers.

August traditionally is my "vacation" month when I don't publish a monthly newsletter or write daily e-mail commentaries. I will be sending y'all weekly updates, & if markets go mad I'll try to offer a few words tending to sanity. Truth is, I probably miss y'all more than y'all miss me, because I have fun writing these.

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.