Monday, January 26, 2009

The Gold Price is on Track to Challenge $920-$940 by Month's End

Gold Price Close Today : $908.50
Change: 13.20 or 1.5%

Silver Price Close Today : $12.102
Change: 17 cents or 1.4%

Gold Silver Ratio: 75.07
Change: 0.037 or -0.7%

Dow Industrial: 8,116.03
Change: 38.47 or 0.5%

US Dollar Index Today: 85.47
Change: -0.03 or 0.0%

Gold and Silver Prices extended last week's gain today. The silver price jumped 17 cents to $12.102 and the gold price jumped 13.20 to US$908.50. The gold price is on track to challenge $920-$940 by month's end. Silver faces a tiny resistance at $12.50, but really targets $14.00. The $920-$940 area was last July's top, so when gold clears that barrier, it will draw lots of attention and scoot even faster.

Pause for a moment to ponder with me the gravity driven trajectory of the Dow In Gold Dollars. Y'all will recall that this measures the value of the Dow Jones Industrial Average in "dollars" of gold (0.0483 troy oz), which gives us one unchanging measure of the Dow back to its birth in 1896. That measure has now broken the longstanding G$200 (9.646 oz) mark and sunk to G$184.67 (8.907 oz). To remind you LO! How the mighty have fallen! The DiG$'s high came in August 1999 at G$925.42 (44.767 oz). The DiG$ is the most reliable indicator I use. Before the end of the bull market in gold/bear market in stocks, one to two ounces of gold (G$20.672 to G$41.344) will buy the entire Dow.

Perhaps this makes it easier to understand why I have recommended so long that y'all swap stocks for silver and gold.

US DOLLAR INDEX answered our questions today by dropping 82 basis points, then another 30 basis points (total 112) by 4:45 central time, while I am writing this. News of a gazillion lay-offs today helped the dollar not at all. Dropped back to 50 Day Moving average at 84.21. If it falls through that, it will negate the idea the Dollar Index will rally to 88.

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.