Thursday, March 12, 2009

Assuming Gold Makes Good on 927 Tomorrow and Trades Higher - Buy Gold

Gold Price Close Today : $925.20
Change: 14.80 or 1.6%

Silver Price Close Today : $13.020
Change: 20.5 cents or 1.6%

Gold Silver Ratio: 71.06
Change: 0.018 or 0.0%

Dow Industrial: 7,170.06
Change: 239.66 or 3.5%

US Dollar Index Today: 87.32
Change: -0.30 or -0.3%

Whoa -- strange day! Better not get on the wrong side of this one.

STOCKS rocketed up 239 points to close the Dow at 7,170.06 and the S&P500 at 756.74. A close over 7,255 confirms that the long-awaited rally hath arrived. Watch it closely for your chance to sell any remaining stocks. Have y'all noticed how the stock market and the US Dollar are moving inversely to each other? Mmmmm.

The US DOLLAR INDEX closed down 31 basis points at 87.324. Bill Murphy pointed out this evening in his commentary that the Swiss announced today they have been selling francs against the euro and intend to buy bonds. Ominously, the first salvo in the currency wars and the race to depreciate your own currency. Bad for fiat national currencies, very good for gold.

This morning silver and gold prices were fiddling around, then suddenly the gold price leapt up US$10. It was knocking on 930. I threw in the towel on my bearishness and bought. I wondered later in the day if I'd made a mistake. Got a bit nervous as the aftermarket backed off to 923, but now its trading over 927, which if y'all remember is my technical break point. No telling what skulduggery governments are mounting unseen, but somebody knows enough to buy gold. Don't fight this rise, don't get cheap. Assuming it makes good on 927 tomorrow and trades higher, buy gold.

SILVER in the aftermarket is trading pennies from its 200 day moving average at 13.10. If this advance is genuine, it needs to climb over that and then best 13.50. Look for a strong day tomorrow. Buy silver, too.

Another hint that something is happening behind the curtains: gold and silver supply are beginning to dry up again. Deliveries are lengthening out to 2 weeks. One big dealer stopped trading American Eagles today -- supply not reliable enough. That's like hearing the wind sigh through the treetops when you know a hurricane is coming.

Y'all are some of the kindest people in the world. Thank you for your e-mails confirming you're praying for my wife, Susan, and for your many suggestions.

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.