Monday, March 30, 2009

If the Gold Price is Going to Drop Further, You'll See it This Week, Probably Tomorrow

Gold Price Close Today : 915.50
Change: -7.70 or -0.8%

Silver Price Close Today : $13.023
Change: -58.7 cents or -4.3%

Gold Silver Ratio: 70.30
Change: 2.466 or 3.6%

Dow Industrial: 7,522.02
Change: -254.16 or -3.3%

US Dollar Index Today: 85.62
Change: 0.48 or 0.6

Gold's performance today was not particularly edifying, but competent still. It fell US$7.70 to US$915.50. If the gold price is going to drop further, you'll see it this week, probably tomorrow. Otherwise it shouldn't drop further than it did today at its 908.45 low. US$906 ought to hold firm.

The SILVER PRICE always takes the downside hit harder than gold: smaller market, more volatile. Ratio rose to 70.30. Silver's low today was 12.91. It might yet trade as low as 12.80, but today showed grace under fire.

Continue to buy silver and gold on weakness.

The US Dollar Index is reaching for its 50 Day Moving Average (DMA) at 86.22, or for resistance at 86.50. Possibility exists it may have broken out to the upside. If so, the dollar will have no problem breaking through 86.50. Otherwise, the downtrend remains in force. I suspect this is merely a countertrend bounce.

In stocks you are watching the correction of the first leg up in a bear market rally, NOT, I repeat, NOT the end of the bear market. Fill your ears with cotton or cork or pitch or whatever you need to keep out the seductive song of Wall Street's sirens, luring you back to the wealth-stripping whirlpool. Commentators will commentate and find all sorts of reasons (like Obamaramalama's latest antics) but in truth these are merely coincident to what the market was ready to do. Dow dropped below its 50 DMA (7,583.31), and probably will drop to 7,200, a 50% retracement.

Lately Obama is demanding that the present GM CEO quit -- sort of as a condition of further govenrment bailouts. Here we see yet another example of why government shouldn't run the economy. What makes Obama qualified to pick the CEO of a multi-billion dollar company? Maybe the present one is bad, maybe he's good, but my 6 year old grandson could make as good a pick as Obama, who hath never in his life met a payroll or run a real business. Another example of the same is the lynch mob after AIG execs who received bonuses. The mob never stopped to think that they had CONTRACTS that guaranteed those bonuses. Many of them were working to restructure the company for nothing more than the bonus, but it made a convenient soapbox for Bernanke, Geithner, and Obama, who had all already signed off it.

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.