Tuesday, March 03, 2009

Good Chance That Silver and Gold Prices Bottomed Today

Gold Price Close Today : $912.90
Change: -26.10 or -2.8%

Silver Price Close Today : $12.695
Change: -35.5 cents or -2.7%

Gold Silver Ratio: 71.91
Change: -0.044 or -0.1%

Dow Industrial: 6,726.02
Change: -37.27 or -0.6%

US Dollar Index Today: 89.16
Change: 0.26 or 0.3%

Good chance that silver and gold prices bottomed today. Might not have looked like, seeing that waterfall down 26.10 in the gold price to 912.90 and the silver price tumbling 35.50 cents to 12.695, but both were snappy in the aftermarket at 915.50 and 12.83.

Gold's low today was 904.50, and remember that 905-ish level was strong resistance on the way up, so it contributes strong support now. We may see the gold price touch back to 905 after a brief rise, but I don't think 905.00 will be breached. If 'tis, 'twill be at the opening tomorrow. If the gold price withstands that, we've see the bottom. And if gold falls thru 905, don't expect it to drop lower than $880.00.

Silver's low today was 12.41, a number that ought to ring familiar on y'all's ears. As gold goes, so goes silver. That's probably the bottom.

My wife thought I had finally gone crazy this morning. She was dressing in the bedroom and I was in the bathroom brushing my teeth, and both of us were listening to National Proletarian Radio ("Brought to you by the world wide socialist revolution -- visit us a www.killacapitalist.org.") I was laughing so hard Susan thought something must be wrong, but I couldn't help it. It was one feckless, lunatic commentary after another. The rotten financial, political, and government structures are crashing down around their ears, and all these loops can do is parrot, "Save the banks! Save the banks!" I exploded when the goof on the stock market commentary wound up by counselling the victims (those listening) to stay in the stock market so they don't miss the next rally. Took me four minutes to clean all the toothpaste off the mirror.

If I had been writing a parody of stupid things clueless announcers might say, it was the script for this morning's show on Radio Red Alabama. What a hoot.

Meanwhile the stock market graph today looked like the EKG off a patient in ventricular fibrillation being zapped with a defibrillator -- up and down, up and down, then down for good. No, the Dow didn't sink too much, down 27.67 to rest 6,726.02, yet another new low. S&P 500 sank 4.49 to 696.33. From here, my targets at 6,000 and 6,250 don't look too far away -- but then, I don't work for National Proletarian Radio.

US dollar index today rose another 26 basis points to 89.16. As I said yesterday, it needs to beat 90.50 to pass the 3%-breakout test, but whether it rises further or not won't make much difference to silver and gold. They've cut loose from all the fiat currencies, dollar, euro, and yen, to walk their own upward path.

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.