Monday, March 09, 2009

Be Calm and Buy the Dips

Gold Price Close Today : $919.20
Change: 22.90 or -2.4%

Silver Price Close Today : $12.820
Change: -50.3 cents or -3.8%

Gold Silver Ratio: 71.70
Change: 0.988 or 1.4%

Dow Industrial: 6,547.05
Change: -79.89 or -79.89

US Dollar Index Today: 89.16
Change: 0.61 or 0.7%

The GOLD PRICE fell back 22.90 today to land at 919.20. This is in the hazy edges of support that runs from 920 to 927. Silver dropped 50.3 cents to 12.82. It appears we are in for several frustrating weeks of back and forth. Gold might turn around tomorrow and reach for $1000 again, then next day fall back. Ahead probably lies one more failed push toward $1,000, then a drop to 920, 906, or lower (880?), before gold finally takes off and pushes through $1,000.

The SILVER PRICE will ride along, running between 14.38 and 11.00. These corrections always tax nerves and patience. Be calm and buy the dips. Nothing fundamental or technical has changed to change our strategy. Get out of stocks and dollars and into silver and gold.

I have a feeling I've been in this place before.

The US DOLLAR INDEX today rose 60.5 basis points to reach 89.16. This is the same old talking out of both sides of its mouth, not high enough to unequivocally break out upside, never low enough to break down. Probably this is merely burning up ammunition preparing to surrender, but it could just as well turn and rise. We just have to wait for the market to tell us.

Stocks -- now what do y'all think I'm going to say? -- fell again today. Dow dropped 80 points to 6547, the S&P500 6.85 points to 676.53 Stocks did not reach a new low against gold, however.

I messed up again. Some computer demon put a typographical error in my Gold Coin gross weight chart, and I had the 1/2 oz. American Eagle/Krugerrand entry wrong. I've uploaded a corrected version, so go back to & download it again, please. I apologize.

One reader wrote me that coin weights alone would not be enough to detect every counterfeit. True, but it will catch most of them. For the rest, you'll have to buy a micrometer and write each national mint to find out the diameter and thickness. Alternatively, you can get a genuine coin and compare all else against that. In the coming days I'll give y'all a few more tips on identifying counterfeits.

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.