Thursday, January 15, 2009

If Gold and Silver Prices Close Higher Tomorrow, I Would Call that a Bottom

Gold Price Close Today : $806.70
Change: -1.50 or -0.2%

Silver Price Close Today : $10.420
Change: -3.2 cents or -0.3%

Gold Silver Ratio: 77.42
Change: 0.094 or 0.1%

Dow Industrial: 8,186.60
Change: -13.54 or -0.2%

US Dollar Index Today: 84.54
Change: 0.15 or 0.2%

SILVER and GOLD PRICES behaved oddly today, as they did at their bottoms in November. At the Comex closes the gold price was down $1.50 to $806.70 and silver down 3.2 cents to $10.42. But without any special news, both rose dramatically in the aftermarket, gold to $815.90 and silver to $10.565. That would have been a key reversal, had those aftermarket prices appeared at the closes. Last time metals turned the first half of the key reversal took place the same way, i.e., break into new low territory with prices in the aftermarket above the previous day's close. If gold and silver prices close higher tomorrow, I would call that a bottom.

One of America's greatest men of the last 100 years passed away last night: Charles Walters, founder of Acres USA. If there is a biodynamic and organic farm movement alive today, it can thank Charles Walters for the favour. He was a journalist, but truly a man for all seasons: economist, agronomist, thinker, humorist, elegant stylist. God granted me the privilege of knowing and learning from his these last few years. I will miss him terribly. This world will miss him more. Requiescat in pace.

The stock market today staged a very dodgy performance, breaking to a new low for the move at 7,995, then "discovering" that stocks were a great buy, rallying 200 points to close at 8,186.60. Yet that close was 13.54 points lower than yesterday. Technically, that's not a great showing. You'd expect a genuine rally to break to a new low first, then close the day higher. To break to a new low, then close the day lower, well, that's just . . . sorry. Weak. And it looks suspiciously like the Invisible Hand (read: government's Plunge Protection Team) was leading the buying.

Whence arose the fear in Stock-land? Bank of America has indigestion from gobbling down Merrill, and having received a chintzy $25 million only from the government so far, has gone back to the trough to stick its snoot in for another $15 billion. BoA shares today fell 14% after dropping 27% already this month. Rumor whispers that BoA needs $200 to $300 billion to rise above the waterline. The bailout are nowhere near finished.

US DOLLAR INDEX has slowed down its rally, down in the 15 - 18 basis points a day range. Within next two weeks the dollar will turn down again.

Stay warm. It's supposed to hit 8 degrees F. here tonight. Throw another log on the fire!

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.