Thursday, September 11, 2008

Silver Closed at $10.49 and Gold at $741.30 - That Could be the Bottom of it

Gold Price Close Today: 741.30
Gold Price Close Yesterday : 757.90
Change: -16.60 or -2.2%

Silver Price Close Today: 10.490
Silver Price Close Yesterday : 10.817
Change: -32.7 cents or -3%

Here's an eye-catching development: today the Dow in Gold Dollars, measuring the value of stocks against gold, reached a new high by pennies, G$318.84 (15.424 oz). Think of an unfinished "M" and you can picture it: Low 17 March at G$247.14 (11.955 oz), climbs by 2 May back to G$315.31 (15.253 oz), back down to G$231.86 on 15 July (11.216 oz), then back to G$318.84 (15.424 oz) today. May be a double bottom, or may be the limit of the move, since G$318.90 is old resistance. Tomorrow will tell us. Remember that the Dow in Gold Dollars is the most faithful & reliable indicator I follow. If it breaks out above G$318.84 (15.424 oz) then stocks could outperform gold for quite a while -- 6 months or more. Of course, silver will follow right along with that. But it hasn't broken out yet.

Odd, odd, odd, these charts. I see straight-up breakouts in the DiG$ & the Gold/Silver Ratio at 70.67, but they just make no sense where they are. The Ratio has moved up to the top of an old resistance area -- Sept. 02 to Dec. 03. Ought to stop there, if there's any logic left in the world.

Message is plain: the market is handing us another opportunity to swap gold for silver. Better do it quickly.

The US DOLLAR INDEX managed to climb above 80 today, yahoo. Now it's hitting tougher resistance. From here it ought to correct, which will give us a chance to gauge how well silver and gold prices will come back.

Well -- the silver price closed at $10.49 (down 32.7 cents) and the gold price at US$741.30 (down 16.60). That could be the bottom of it. Today for the first time in a long time both metals rose in the after market, the gold price to 745.80 and thte silver price to 1053. Who can pick bottoms? Who recognizes them?

[For those of you still waiting for Confederate General silver rounds, the mint is shipping me 6,200 tomorrow, so the rest of your orders will ship as soon as we receive those. Please forgive us for the delay.]

On this day in 1789 Alexander Hamilton was appointed first US Treasury Secretary. Hamilton & Jefferson, who was Secretary of state in the same cabinet, represent the two opposing philosophies that have struggled for supremacy in America ever since. Jefferson saw the country's strength in its independent freeholders, farmers & craftsmen & shopkeepers, the "middlin'" people, and of course hard money and strictly controlled banking. Hamilton favoured big monied interests, a national bank, corporations, and large merchants -- what we today would call "special interests" and multinational corporations -- and paper money.

For the first 80 years, the Jeffersonians managed to hold their ground and even generally prevail. The War Between the States engineered the complete victory for the Hamiltonians & corporations, who have ruled the country ever since.

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.