Monday, August 04, 2008

A visit to the 200 DMA is Often Seen, and Right Now that Stands at $888.65 - A lot of Buyers will Swarm in There

Gold Price Close Today : 900.10
Change: 8.90 or -1.0%

Silver Price Close Today : 17.103
Change: -37.8 cents or -2.2%

US Dollar Index Today: 73.50
Change: 0.11 or 0.1%

Vacation or not, I couldn't resist commenting on a day as filled with turmoil as this one.

I'm not sure what's going on, because the measly 10 or 13 basis point rise in the US Dollar Index shouldn't be enough to prompt this weakness in silver, gold, & oil. Right now September crude is down 3.69 to 121.41 a barrel, & that fall stands out of the line-up as the most likely catalyst of panic.

Y'all, of course, shouldn't be surprised. I've been saying for 4 weeks or so that an oil correction that shaved 30% off the price was possible. Confusion ariseth, when people confound short term movements with long term change of trend. Some scream, "Deflation! Deflation!" as if the world forever hung in the balance of Zoroastrian monetary forces. Wise up! The entire world monetary system with its central banks is set up for inflation. It hath no other power or purpose, & if you think Ben Bernanke & Paulson & the other lackeys & running dogs will be allowed to let the world lapse into deflation without at least a little hyperinflationary money creation, you don't know "Sic 'em" from "Come here."

Meantime what you see is either an inward market correction where sellers temporarily outweigh buyers in the metals markets, or some outward force weighing on the market. That might be fears of banking collapse & financial mayhem, but it could just as well be Nice Government Men monkeying with silver & gold. After all, they MUST at all costs try to stop gold at $1,000, because crossing that line will be a warning whistle to "realizers" around the world that the dollar is dying. And don't kid yourself, it's not the dollar alone that's in trouble, it's every national currency, including the sorry Euro and shabby yen. They are trash, all of them.

From here, where might silver & gold fall? In the aftermarket today the GOLD PRICE fell from a $900.10 close to $894, and silver from $17.103 to $16.92. Gold had better not, and most likely will not, close below $846/850. More likely would be some higher level, maybe $890. A visit to the 200 DMA is often seen, & right now that stands at $888.65 (a lot of buyers will swarm in there). Gold has in this bull market infrequently dropped 5% below its 200 DMA, which would take it to $844.22, just about the last low. Another low around $850 would be a terrific, star-crossed, sure-thing place to buy, but we may not see that. My guess is that whatever fall is to come will arrive tomorrow, maybe one or two more days, and then be ended. Meanwhile the silver price might drop as low as $16.75 or even $16.25.

Remember, these are just my educated guesses, not targets. To take advantage of these bargain prices, I would continue to buy.

My wife Susan continues to improve, although her heart surgery is still scheduled for 26 August 2008. Please accept my continuing thanks for your prayers. They are working!

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.