Tuesday, February 24, 2009

GOLD PRICE has Earned a Short Break, and Began to Take it Today, Falling $25.50 to $969.10.

Gold Price Close Today : $969.10
Change: -25.50 or -2.6%

Silver Price Close Today : 13.995
Change: -45.5 cents or -3.1%

Gold Silver Ratio: 69.25
Change: 0.416 or 0.6%

Dow Industrial: 7,350.30
Change: 235.52 or 3.3%

US Dollar Index Today: 86.77
Change: -0.49 or -0.6%

GOLD PRICE has earned a short break, a breather, and began to take it today, falling 25.50 to US $969.10. I don't expect any gold price correction to last long, maybe a couple of weeks, and it ought to be contained by $925, although gold could drop to $890 without damaging the uptrend.

SILVER PRICE dropped 45.50 to $13.995. Mmmm. . . Still holding on to that support at $14.00. A correction in silver might drop to $12.25. As with gold, expect any correction to run its course in 2 - 3 weeks.

Yesterday the Dow in Gold Dollars (DiG$) fell to a new low, G$148.52 (7.185 oz). Since yesterday's Dow low did not exceed the Oct. 2002 low by 3%, we can't say yet that the Dow has "broken down," but it rests under a cloud of suspicion & need to prove itself innocent. More likely, yesterday was a spike low that will mark the beginning of a 2-4 month rally, since other indicators show a bullish divergence. Any close below yesterday's 7,114.78 knock that theory in the head, dead.

Today all stock indices recovered enthusiastically; Dow rose 235, S&P 500 rose nearly 30. If you still own stocks (whether directly or thru an IRA or 401(k), or the like) watch the Dow like a hawk to sell them all when it reaches 9,500 or so.

The US Dollar Index fell another 49 basis points today, offering further proof that its rally to 88 was a double top. Mark that both the dollar & gold sank today -- uhh, uhh, what's that supposed to mean? Merely that you can't expect them to move in lock step. Reckon some of the fear dissipated today.

I understand that The Obama will make a speech tonight to explain how he will spend truckloads of new money "fixing" health care (a sobering thought) and promoting alternative energy AND will balance the budget by 2010. Day after day I wonder what planet I'm on. Is there anybody in America stupid enough to believe the government can both spend huge amounts, accruing huge new debt, and yet balance the budget? This is like reading pornography to cultivate purity of soul.

Here's something else, dear friends, but don't tell anybody I said this or they'll hang me for a communist: We do NOT need to save the banks. The banks are the problem. We need to abolish the parasitic banks, abolish fractional reserve & the "Federal" Reserve. "Saving" the banks is like "rescuing" the Tapeworm that is devouring your life.

Sorry I missed sending out a commentary Monday, but I had to take Susan to the doctor up in Nashville, and that's an all day trip. The word has gone out that her insurance is paying & those doctors are making a good living off of her. She's doing very well, except her heart rhythm is, well, sort of backward ("junctional"). She looks good & has more energy than a hummingbird.

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

- Franklin Sanders, The Moneychanger


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.