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Saturday, August 23, 2008

Three Outcomes are Possible from here for Silver and Gold Prices: Another Drop, a V-Bottom, and a Touch-Back

Gold Price Close Today : $827.40
Gold Price Close August 15th: $786.00
Change: 41.4 or 5.3%

Silver Price Close Today : $13.47
Silver Price Close August 15th: $12.801
Change: 66.90 cents or 5.2%

US Dollar Index Today: 76.798
US Dollar Index August 15th: 76.798
Change: -0.512 or -0.7%

Here we are seven days after the last waterfall day in silver and gold prices, and the world hasn't ended yet. Neither has the bull market.

Note that silver & gold rose over 5% last week, while stocks fell about 0.4%. The mighty US Dollar Index, once the wonder of the civilized world, dropped 0.7%. Maybe if Putin invaded Nebraska the dollar would jump again? Rhode Island?

Anent the dollar, it's not clear to me yet that the highs seen so far mark the upper limit of the dollar's rally. So far it has only reached the the December 2007 high, and must close higher than 77.85, really 78, to break out upside. The theatrics pulled by Bernanke, Paulson, and their Band of Travelling Tricksters are not much -- coordinating a central bank dollar buying spree, jawboning, etc. O, these are sad old dogs, amd plumb worn out.

STOCKS must be a painful frustration to own. The Great Rally from 10,00 has reached a max of -- 11,867, but mostly it has clung to the underside of the 50 day moving average. This will not inspire any technical analysts to sell their children & invest the proceeds in the stock market. More than ever I repeat, sell stocks and put the proceeds in silver & gold.

My recommendation stands soundly on the Dow in Gold Dollars and the Dow in Silver Ounces. Last Friday's high has remained the high water mark of stocks rise against gold, and it has since fallen back below G$300 to G$290.33 (14.044 oz). Last week probably marked stocks' peak against silver as well at 910.86 ounces to buy the Dow. Today, it is 48 ounces cheaper.Sell stocks, buy silver & gold.

For SILVER and GOLD PRICES it's been a touch and go week, with both metals licking their wounds. Yesterday saw the first single-minded rally, taking gold up to $833 & silver to $13.719. Today, not to anyone's great surprise, both metals fell back as short-term speculators took profits at the end of the week.

Three outcomes are possible from here for silver and gold prices: another drop, a V-bottom, and a touch-back.

Another drop means that after a modest rally off recent lows, both silver & gold prices continue to drop because the bull market has ended, after only seven years. Unless I see the gold price close below $540 and the silver price below $10.35, I categorically reject this possibility.

A V-bottom means that last Friday we saw the wash-out, exhaustion bottom in the metals, & they will steadily (if not terribly speedily) climb from that low. This is the less frequent outcome after a waterfall decline. You'll know a v-bottom is happening if next week the gold price slices clean through $845 - $850 and keeps on moving up.

A Touch-Back is more frequently seen in a recovery rally. The market makes a first low (last Friday), then rallies modestly, then falls off with scary weakness. It bottoms (a) slightly below, (b) same place, or (c) slightly higher than the first bottom. Whenever you spot this constellation & recognize it, the market has just handed you fist fulls of hundred dollar bills. It is practically a risk-free place to buy, especially if the bottom takes place slightly higher than the first bottom.

Where are silver & gold prices now?

Either climbing up out of a v-bottom, or making that rally off the first low. Either way, it won't make much difference where you buy, viewed from the long term perspective of this bull market. Both silver & gold are going much, much, much higher.

(Watch gold's behaviour this week as it moves towards $845. It could slice thru, or it could fall back. Buy any close over $850, or on any decline near $800.)

If y'all have not yet pared your bank accounts down to a maximum of $100,000 in any one bank, you'd better get busy. Big banking trouble is just around the bend, & the smaller banks will be savaged, scavenged, & swallowed without mercy.

A red-wattle pig is a rare breed that's nearly extinct. They're a ginger (red) pig, with two little useless tufts of flesh hanging from their throat. We bought two bred red-wattle sows a couple of months ago. Late this afternoon my grandson Bedford walked in carrying a tiny, silky red piglet,and sure enough, she had little wattles hanging from her neck. Handsome pig!

On this day in 1775 England's King George III declared that his American colonies were in a state of open rebellion. Keen observer, that George.

My wife Susan's heart surgery has been re-scheduled for 27 August, next Wednesday. Please keep praying for her healing, & if you have any prayers left over, you might remember her uxorious husband, too.

Y'all enjoy your weekend!




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


- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
The-MoneyChanger.com

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.



Wednesday, August 20, 2008

With the GOLD/SILVER RATIO at 61.56, I Would Swap Gold for Silver

Gold Price Close Today : $811.10
Change: 11.40 or 1.4%

Silver Price Close Today : $13.093
Change: 0.6 cents or 0.0%

US Dollar Index Today: 76.75
Change: -0.51 or -0.7%

Just a quick word. Odd, don't you think that the Dow in Gold Dollars reached up to its 200 day moving average, around G$306.66 ($14.834 oz), then dropped today back to G$289.23 ($13.992 oz)? DiG$ is still telling us that stocks just can't manage to climb over gold, and that before stocks rise, gold will.

Odd trading today, but that's often how it feels after a big waterfall decline. Bottom is usually hit then the next days feel like walking over the battlefield at Shiloh two days after the fighting stopped. What will happen next?

From the silver & gold shorts is bound to come another attack, but from what level? Perhaps when the GOLD PRICE begins to rap on the $825 door? The SILVER PRICE is following now, not leading any parades, but that's as it should be.

With the GOLD/SILVER RATIO at 61.56, I would swap gold for silver (note: gold for silver, not the other way round).

Dollar index took a 51 basis point beating today, but remains at 76.75. Hard to imagine a dollar rally would last long, or reach very high.

Silver American Eagles are available, but only with six to 8 week delays. Other dealers quote 2 weeks. Gold American Eagles available, but at what a price!

Physical demand for silver & gold is still insatiable, and I hear the same from every dealer I speak with. Feels very bogus, a paper market price lower than the physicals market. Ahhh, but "bogus," well, now that's the word for our markets today, huh?



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


- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
The-MoneyChanger.com

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.



Friday, August 15, 2008

Either This is the Greatest Silver and Gold Buying Opportunity of All Time, or the End of a Bull Market

Gold Price Close Today : 786.00
Gold Price Close August 8: 857.8
Change: -71.80 or -8.4%

Silver Price Close Today : $12.801
Silver Price Close August 8: $15.303
Change: 250.20 cents or -16.3%

US Dollar Index Today: 77.310
US Dollar Index August 8: 75.850
Change: 1.460 or 1.9%

Twenty-eight years brokering silver & gold have not prepared me for what I met this morning. One of my wholesalers said he was not selling anything, only buying, until further notice. Another refused to give any prices until he adjusted his spreads. Another was spreading one ounce gold coins, normally at $7 - $8, at $25. Another said he was making no sales for immediately delivery or deferred payment, only sales for 30 days delivery paid at once. Premiums were high: Austrian 100 coronas, 4.7%; Sovereigns 5.2%; Krugerrands 6.8%, American Eagles 8.2% (none for immediate delivery), & Mex 50 pesos 4.5%. 90% silver was at $9,783 a bag, a whopping 6.7% premium (1368 cents an ounce on a 1282 market!). Silver American Eagles for 6 - 8 week delivery, 1586 or 23.7% premium.

But "premium" is only one way of looking at things, dividing the item's price by the spot silver price. Another way to view it is that physical prices have de-coupled from paper prices. The paper prices -- futures, ETFs, etc. -- no longer rule the market.

Physical prices are declaring their independence from paper pricing as those holding physical gold & silver refuse to sell it at prevailing paper prices. I have been expecting this to happen toward the top of the bull market, catalyzed by some paper purveyor's failure, but now? What can it mean? At the very least, the public is nourishing a gigantic hunger for silver & gold in their hands, and no place else.

By now all the leveraged silver & gold longs have been forced out, just as all the dollar shorts have been chastened, bruised, and beaten away. Either this is the greatest silver and gold buying opportunity of all time, or the end of a bull market.

But it is NOT the end of a bull market. Time alone argues that. A bull market runs 10 - 20 years, this one has run only 7, since 2001. Those who think silver & gold have fallen into the "bursting of the commodity bubble" completely misunderstand what drives them in the first place. Silver & gold are not commodities; they are money.
When investors pile into silver & gold, it's not any commodity bubble forcing them there, but monetary demand. They aren't buying metals because they think all the Indian ladies are going to be wearing two nose rings instead of one this season, or that the American bourgeoisie will suddenly begin stockpiling sterling silver forks again.

They are buying metals because -- listen to this, get it straight once & forever -- they distrust fiat central bank currencies (or if you prefer, national currencies). The dollar is trash, the yen is trash, the euro is trash; all are equally insolvent, equally unbacked by anything expect a politician's or central banker's promise, which is not nearly as good as that of any madame at any bordello anywhere.

The dollar is rising? So, why? Did it become better, acquire more gold backing, solve its chronic balance of payments deficit last night? Come on. Did the euro get worse overnight? The yen? How much worse could it get? You are seeing competitive devaluations, all very much worked out collegially in advance by central bankers. Fundamentally meaningless.

What is NOT meaningless is that the Great Alternative Currencies, silver & gold, have long been advancing against ALL national currencies. All markets swing like pendulums, too far one way, then too far the other. Silver & gold prices became overbought -- a lot of people short dollars were long silver & gold. The dollar rallied, oil & commodities fell, sucking down silver & gold money. Look at the numbers. Even with gold down to $787.50 today, that's only a 21.5% correction, while always more volatile silver is down 37.4%. Friends,these are normal, not outlandish, corrections. Sober up.

Out with the worst of it: If the silver price is correcting its entire rise from Nov. '01 at $4.025, a 38.2% correction would carry to $1425.3; a 50% to $12.30 (nearly seen today), a 61.8% correction to $10.35.

Assuming the gold price is correcting the move from $255.1 in Feb. 01 to $1003.2 last March, 38.2% carries it to $717.43, 50% to $629.15, 61.8% to $540.87. Carefully mark that these are not my projections, only what is possible at those commonly seen correction percentages.

On the other hand, if silver & gold pricse are correcting the 2006 to 2008 moves, then gold hit its 50% correction level today at $782.60, & silver finished its correction today to the 75% level.

Crazy, am I? Five years into a bull market in 1987 the Dow plunged over 30% in just four days. Was the bull dead? Hardly, it rose over ten times in the next 12 years.

Bottom line: silver & gold remain in a powerful bull market with another seven or more years to run. The bull market is handing you a gift: buy. Bottom was probably seen today, but recovery will take some while. Dollar rally may carry to 82, but will peter out in 3 months at most, probably sooner. Stocks may reach 12,500, but will come down hard thereafter.

On this day in 1971 President Nixon announced a ninety-day freeze on wages, prices, and rents, and formally reneged, welshed, and repudiated any promise to pay gold for US dollars, even to foreigners. He broke the dollar's -- and the world's -- last link with monetary morality, & set the whole world afloat on a sea of paper money and floating exchange rates. Tricky Dick did some bad things, but of all he did, this damaged the most.

Footnotes: The mint begain striking the long awaited Confederate General silver rounds last week, but was displeased with the first run's quality so re-melted them. Shipments to us begin next week, & quick as we get them, we will ship them to you. I deeply appreciate your patience.

My wife Susan is thriving now on her supplements & copious rest, little bothered by her symptoms. Still she will have to undergo heart surgery to repair or replace her mitral valve on 26 August. Please accept my heartfelt thanks for your prayers & e-mails & cards. Your kindness to Susan & me is a great treasure. Please keep praying.


Y'all enjoy your weekend!



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


- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
The-MoneyChanger.com

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.



Wednesday, August 13, 2008

Silver and Gold Prices Rose Smartly Today, But as Yet that Says Little

Gold Price Close Today : 825.00
Change: 16.80 or 2.1%

Silver Price Close Today : 14.824
Change: 36.2 cents or 2.5%

US Dollar Index Today: 76.48
Change: 0.16 or 0.2%

SILVER and GOLD PRICES rose smartly today, but as yet that says little. Any market that has fallen as fast as silver & gold (since 28 July, 12.9% for gold & 16.2% for silver) will, even if destined to fall much further, at least turn around and feebly rally. Until we see how far those rallies carry, we can't know much.

The GOLD PRICE rose $16.80 to close at $825 (significant number) and the SILVER PRICE closed at $14.82, up 36.2 cents. Ahh, we are back to old numbers, and old resistance areas! $14.86 was silver's high in 2006, remember? $850 is the big number above for gold.

Number me not among those who believe silver and gold have fallen out of their bull market into a bear. Not so. Silver & gold remain well within usual correction bounds. In 1987 the stock market, then in a bull market from 1982, fell 30.7% in four days(from 2508.16 to 1738.74 on 10/19/87), and 35.8% from that's year's high in August. Cries of "Bull Market Is Over!" rang out, but as well all know, the Dow was then still 12 years from its ultimate top against gold (August 1999).

Be calm. Keep your eyes on the horizon, and on the primary trend, and buy silver and gold. Like Odysseus passing the sirens, tie yourself to the mast & stop your oarsmen's ears.

Y'all know that I rely heavily on the DOW IN GOLD DOLLARS, which is the Dow's value converted to statutory dollars of gold (0.048375 troy ounce fine gold). For the 12 years I've been watching, it has been the very most reliable indicator I've ever used. If it says stocks will rise against gold, they rise. If it says stocks will fall against gold, they fall. If it says a rooster dips snuff, you can look under his wing for the brush.

So what's the DiG$ saying now? Yesterday it made its highest close so far in this move, G$297.79 (14.406 oz), up from a low at G$231.86 (11.216 oz) on 15 July. To correct 50% of the fall from G$432.45 (20.920 oz) the DiG$ would have to climb to G$332.155 (16.068 oz). Even the least of the commonly seen corrections, 38.2%, would take it to G$308.49 (14.923 oz) far above the high seen thus far.

However, it did touch the 200 Day Moving Average today at G$292.20 yesterday. Today's close at G$288.98 throws the DiG$ back below the 200 DMA. As y'all may remember, markets in primary downtrends at long intervals return to their 200 DMA, which offers a great opportunity to sell them again.

How to interpret the DiG$ now? Until it makes good that touch against the 200 DMA, and crosses the 50% correction at G$332.155 (15.584 oz), and then the 61.8% correction at G$355.82 (17.213 oz) and continues to climb, I have to conclude the Dow remains in a bear market against gold. Short term the DiG$s is whispering that stocks' rally has not much further to run.

Buy silver & gold.



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


- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
The-MoneyChanger.com

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.



Monday, August 11, 2008

It Seems the Long Correction from the March 2008 High Was Finished Today

Gold Price Close Today : 821.50
Change: -36.30 or -4.2%

Silver Price Close Today : 14.595
Change: -70.8 cents or -4.6%

US Dollar Index Today: 76.38
Change: 0.53 or 0.7%

Take a good look at the Dow Jones Industrial Average at 11,782 and the S&P at 1305, and the US dollar index over 76 (!) at 76.38. Take a mental picture, because you won't be seeing it for long. My friend BL called today and said, "It's all part of one movement -- stocks & the dollar high, silver, gold, and oil retracing, it's all the same trade." He's right of course.

Today both silver and gold prices fulfilled my targets for bottoms. Yes, they may play kissy-face with these prices sideways for a while, but I doubt they will fall much lower, if at all. The Silver Price has hit its 300 day moving average and pierced it, something that happens only at rare intervals in a bull market, a perfect time to buy. Premiums on all gold coins, even the lesser known ones, have risen. Krugerrands are scarce as honest judges, and at their highest price in 20 years. Best price I can find on US 90% silver coin at wholesale is 25 cents over spot per ounce, and usually it sells for 25 cents under spot. I can't remember ever seeing premiums climb this high and this fast when silver and gold prices are falling. I have to interpret it as HUGE demand for physical silver & gold.

It seems the long correction from the March 2008 high was finished today.

Buy silver & gold.



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


- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
The-MoneyChanger.com

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.



Friday, August 08, 2008

How Low Might the Silver and Gold Price Drop?

Gold Price Close Today : 857.80
Gold Price Close August 1st : 909.00
Change: -51.20 or -5.6%

Silver Price Close Today : 15.303
Silver Price Close August 1st : 17.481
Change: -217.80 cents or -12.5%

US Dollar Index Today: 75.850
US Dollar Index August 1st: 73.390
Change: 2.460 or 3.4%

Rough week for metals! What? The dollar's up? Are the Heads right,is this the end of Commodity Demand and return of the Dollar (think "Freddy Kruger")? I'm just a natural born fool, an ignorant ridge-runner, but the way I figure it, they're right 50% of the time, and I can do that well without breaking a sweat.

So here's my try: Big news this week is the US DOLLAR INDEX breaking out to its highest price since March this year. Freddy -- whoops, make that "the dollar index" -- climbed over its June high (74.31) & scattered the shorts. As they fled, the dollar jumped to 75.85, up nearly 250 basis points for the week.

But put this in perspective -- back in 2001 the Dollar Index stood at 120, and even in 2006 its low was only 82. All this has the smell of a job by the Nice Government Men, not only because it has no basis in fundamental economics, but also because the technicals don't support it. MACD is at the top of the range, and the RSI is way over bought. Of course, markets can always wax more overbought, but this one can't last long.

Hey -- wait a minute! I think we've been snookered. If the high dollar is crushing silver and gold so badly, then how come back in March when the dollar was trading at this same price Gold was over $1,000 and silver banging on $21? I hate to break the news to y'all, but markets, and the big, tough cigar-smoking men who trade them, think like 12 year old teeny-bopper girls. They flop from one fashion to the other with no reason much at all. Hence the "reason of the day" for silver ad gold and oil sinking is either "end of commodity demand" or "rising dollar." How about the rational explanation, that commodity markets, led by oil, just swung their pendulum too hard and now must swing backwards in correction?

STOCKS rose today, but anyone who bothers to look at a chart reaching back more than 4 weeks won't be too impressed. An enormous head and shoulders top hangs above the market (5/07 - 12/07), and the big rally today took it nearer its 200 DMA at -- 12,510.95. This rally will be over by end-August.

DOW IN GOLD DOLLARS hints that this stock rally might carry the DiG$ to G$415 (20.076 oz).

The GOLD/SILVER RATIO reached 56 today, but on the chart that's no big deal. It merely revisited its 200 Day Moving Average, but remains in the megaphone pattern that foretells a breakdown. A spike in the ratio always coincides with silver and gold lows within days, if not on the very day.

The SILVER PRICE has hit and pierced its 300 DMA (now 1551). This has happened only twice since September 2005, the other time in August 2007. It was followed by an enormous price rise. August has seen significant silver lows in 2002, 2003, 2004, 2005, and 2007, with a late July low in 2006. No news there, it merely offers a favourable time to buy. In other words, August lows help confirm bottoms.

How low might the silver price drop? Remember when I talk about targets they are possibilities, not certainties. If silver were to drop to the longest term uptrend line, it might drop as low as 1400. However, $14.80 - $15 offers powerful support, as does $15.50. The spike upward in the GOLD/SILVER RATIO supports the view that we are now seeing a bottom. [Swap gold for silver now.]

GOLD'S future is cloudy, too. It's not at all clear whether $850 will be broken before the climb resumes. The one thing you must be clear on is that the bull market has not ended. The market proverb holds that the bull likes to shake off all riders. Now wouldn't a close down below US$850 just do that? Every croaker in the swamp would crawl out to RIVET to the night sky that silver & gold are dead & the day of doom deflation has begun.

So IF [remember, "IF"] gold were to drop below $850, where might it stop? Well, in November 2007 a triangle formed with an apex of $803. Markets often return to the apex of triangles from which they broke out. Gold has a nest of support from $832.50 to $775.50, so anywhere in there might prove a backstop. Gold has already broken its 200 DMA (now $887.74) but the 300 DMA is now at $820.70.

All things considered, if gold doesn't hold at $846, then it might fall to $820. However, remember that y'all are watching a paroxysm, a spasm, & paroxysms are fast events quickly ended. The low for silver and gold can't be further away than next Wednesday, if we didn't see them today. Another finger pointing at a bottom is non-confirmation from platinum & palladium today, which did not go for new lows.

Y'all can panic if you want, but me, I'm still buying silver and gold, and more still. One sign that forces me to buy is the rising premiums on physical silver and gold. Physical demand is HUGE and we never see these premiums & volumes unless metals are near bottoms.


Thank you all for your many cards, e-mails, & prayers on behalf of my wife, Susan. The supplements she is taking are really helping her symptoms, and, we hope, strengthening her heart for surgery on 26 August. Thank you for your generous kindness, and please keep on praying for her!


Buy! Buy! And again I say, BUY!


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


- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
The-MoneyChanger.com

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.



Tuesday, August 05, 2008

The Gold Price Could Stop Anywhere Between Here and $846

Gold Price Close Today: 878.60
Change -21.50) Or -2.4%

Silver Price Close Today: 16.537
Change -56.6 Or -3.3%

US Dollar Index Close Today: 73.93
Change 0.43 Or 0.6%

Obviously the silver & gold market are experiencing a paroxysm, a spasm of downmoves. Time for us to reflect what that means, and how it looks. Paroxysms by the nature cannot last long. This one should be finished by the end of this week, perhaps
sooner.

A friend mentioned an interesting idea, interesting because it fits in with the nature of bull markets. Remember that the bull always tries to shake off as many riders
as possible. My friend mentioned that if gold went down and broke the 846 low, all the mouths would pile on proclaiming the end of the gold market. Perfect opportunity to buy, as a matter of fact.

But what else says that we are not seeing the collapse of the silver & gold bull markets? First, time. Those primary trends have only been underway about 7 years,
far short of the 15 or 20 they usually last.

Here's another point, one that I have learned to ignore at my peril. Premiums on almost all forms of physical silver & gold have risen sharply, and are at highs not seen in a long time. Remember, these are very small changes, but significant because they are usually so steady. Rising premiums can only arise out of rising demand, sharply rising. In fact, there is a sort of backwardation in the market, with Krugerrands offered for immediate shipment at a slight premium. (Stop! Jump to no conclusions. These bottlenecks are normal in a market this active.)

I don't know about other dealers, but we are experiencing HUGE demand. Not only are there many, many people ordering, much of this business is very high dollar, in other words, serious people doing serious buying. Now the Nice Government Men and the bilious Bullion Banks & the black shirts on the futures markets floor can play all the hanky-panky they want, but in the end everything comes back to physicals. When I see extraordinarily strong physical demand like this, I know that a bottom must not lie
far off.

Want a bottom target? Just look around and pick one! Gold could stop anywhere between here & 846, even pierce that some, and silver can stop here or 50 cents lower. It's a paroxysm, so I don't know where it will stop, but I know it will stop soon.

Make you want to puke in your wastebasket? I know, I've felt the same way in the past. But not this time -- not this time.

Buy! Buy! And again I say, BUY!


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


- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
The-MoneyChanger.com

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.



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"
The-MoneyChanger.com

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.



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"
The-MoneyChanger.com

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.