Thursday, March 05, 2009

Today's Dramatic Rise in Silver and Gold Prices Says the Worst of the Correction is Most Likely Behind Us

Gold Price Close Today : $927.00
Change: 21.00 or 2.3%

Silver Price Close Today : $13.105
Change: 20.5 cents or 1.6%

Gold Silver Ratio: 70.74
Change: 0.504 or 0.7%

Dow Industrial: 6,594.44
Change: -281.40 or -4.1%

US Dollar Index Today: 89.08
Change: 0.59 or 0.7%

Here are a few tidbits from the wire today:
** Bank of England lowers Libor rate to lowest in 315 year history, 1/2%, & announces "quantitative easing" (Translation: "will begin printing money")

** Citigroup, trading as the largest capitalization bank in the US in 2007 at $55/share, today fell under $1/share for first time in history.

** GM filed SEC statements that it may not be able to stay out of bankruptcy.

** Dow Jones Industrial average fell another 300 points, with no end in sight.

** European central bank lowered rate to 1.5%

TODAY stocks continued their relentless march to the bottom, led by the same financial companies that landed the economy in this mess to begin with. There's a certain rough justice about that. S&P500 may have to kick some of them out of the index, & the DJIA is supposed to take out any stock that trades under $10/share. Some have, but Dow hasn't.

US DOLLAR INDEX poked its head above 89 again today, up 59 basis points to close at 89.083. To confirm an uptrend the dollar index still needs to close above 90.50.

Be careful what you say, because chances are it'll come back around to slap you in the jaws. Case in point: yesterday I wrote that "A close above 927 would take away all doubt a bottom has been made." In the outcome, the gold price closed -- exactly at 927. Now the earlier close this year was 927.30, but popping up 21 bucks from yesterday, I'd say that counts as gold's confirmation it isn't going lower. Add to that its touch against its lower trading channel boundary yesterday, and I'd say we've seen the low. A close below 906 would negate that.

From 13.125 on 10 Feb. silver leapt to 13.51 the next day. The 13.05 - 13.15 area is crowded with leaps & turns, so silver's close today at 13.1050 is also a bit equivocal, like gold's.

Adding to the case for a bottom was the strong aftermarket taking metals to 934 and 13.34.

Today's dramatic rise in silver and gold price says the worst of the correction is most likely behind us. Now we should get a spicy rise, followed by another down leg, but to higher lows than we've seen already.

That downloadable file with gold coin gross weights has been posted to our home page, Look for "What's new: Protect yourself against counterfeits."

While you're at our website, click on "Subscribe" and look for our internet special. You can subscribe to the monthly Moneychanger for only $95, versus the usual $149.00 price, plus receive a copy of my novel, Heiland.

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.