Tuesday, October 07, 2008

The Low for Silver and Gold Prices Happened Last Friday

Gold Price Close Today : 878.40
Change: 15.70 or 1.8%

Silver Price Close Today : 11.325
Change: 9.5 cents or 0.8%

US Dollar Index Today: 81.04
Change: -0.58 or -0.7%

SILVER and GOLD PRICES took another roller-coaster ride today. Around noon Central Time somebody attacked silver and gold prices, driving gold down to $860, but it quickly recovered. After closing (1:25 EST) at US$878.40, up US$15.70, gold traded up another nine bucks in the aftermarket to US$887.30. Strong performance.

The SILVER PRICE dropped as low at $11.13, but Comex closed at $11.3250, up 9.5 cents, then climbed 22 cents in the aftermarket to $11.545. Premiums are huge but remain strong. Demand is overwhelming us, with 50 or more phone calls waiting on us in the morning. Stock is somewhat more readily available, that is, we will be able to ship 90% silver coin and off-brand 100 oz. silver bars on Monday, but almost everything else is a week or much longer out.

It seems now that the low for silver and gold prices happened last Friday, but even as I say that my "Government Surprise Party" Warning Needle slams over into the red. Watch out for volatility, watch out for manipulation, but buy every dip because (1) government bailouts must result in inflation, (2) driving silver and gold prices much higher. The contagion's spread to Europe only makes that more likely.

In modern usage, influenced as it is by psychobabble, the words "wicked" and "evil" have fallen into disuse. Yet how precisely does one describe (medieval as it may make one sound) an entire system founded on theft, gambling, usury, and exploiting greed? And now that it's falling apart, all those who have fed at its trough with their snoots deep in the swill have become "salvationists". That is, they have discovered that, no matter what happens or how much WE have to pay, the system must be saved. If that's not "evil", tell me what it is.

Stocks closed nearly on the low of the day, the Dow down 500.27 points to 9,455.23 [sic]. The S&P500 closed below 1000, down 996.23 to 60.66. Yet these dismal performances were not the worst news. The Dow in Gold Dollars (measuring the value of stocks in gold) sank, no, plunged, plummeted, to a new low of G$222.51 (10.764 oz), about G$15 (0.726 oz) below the last low in March. I can find no floor here, no target yet. The Dow in Silver Ounces plunged to 819 oz. And stocks will drop lower still. The long term target is the Dow at G$41.34 or less (2.00 oz) & 32 oz. of silver or less. Get out of stocks.

The US DOLLAR INDEX vomited back 55 basis points from yesterday's 100 plus gain. What happened? Is the grand alliance of central banks cracking up? Is somebody dumping dollars? Technically it bounded off the top boundary of the Bollinger band. Dollar remains above its 50 & 200 day moving averages, but RSI has turned down and MACD is ready to turn down. I wouldn't be surprised to see it climb, fitfully, all the way to 83.5, but don't bet on the dollar long term.

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.