Tuesday, November 11, 2008

Silver and Gold Prices are Both Fighting a Stronger Dollar - Don't Let it Bother you: the Dollar's Days are Numbered

Gold Price Close Today : 732.00
Change: -$13.60 or -1.8%

Silver Price Close Today : 9.805
Change: 41.5 cents or -4.1%

Gold Silver Ratio: 74.66
Change: 1.701 or 2.3%

Dow Industrials: 8,693.96
Change: -176.58 or -2.0%

US Dollar Index Today: 87.17
Change: 1.20 or 1.4%

Ouch! Stocks look ready to drop off the cliff again. I hope y'all have sold yours already.

The US DOLLAR INDEX is creating problems for silver and gold prices. Looks like the dollar has finished a correction & broken out upside again into what will probably mark the last leg of its rally. How long might it last? Oh, say, two months, or about to the end of December. Everybody tends to sober up come January 2.

The GOLD PRICE is trending upward (despite today's lower close at $732, down $13.60), but needs that close above $750.

Today's action was mushy, just not terribly enthusiastic. Never mind -- the gold price is building a flat-topped, rising triangle, which formation usually breaks out to the upside. Silver's chart resembles gold, and also shows an uptrend with a flat-topped rising triangle. Today's close at $9.805 might have broken down out of that formation, or it might merely be testing the trend.

But check out the silver price versus the GYX (Index of Industrial Metals).

Silver is now holding its own after dropping from July to mid-September. Since then it has climbed back against the industrial metals to exceed both the July and MARCH highs. More proof that the demand driving silver is monetary, not industrial. Very good sign.

Silver and gold prices are both fighting a stronger dollar. You can hardly expect them to shine on a day when the dollar index gains 120 basis points, now can you? Don't let it bother you: the dollar's days are numbered.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"

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.