Thursday, April 30, 2009

More Dollars to Buy the Same Amount of Silver and Gold Means Eventually, Higher Prices

Gold Price Close Today : 890.70
Change: -9.10 or -1.0%

Silver Price Close Today : 12.305
Change: -44.9 cents or -3.5%

Gold Silver Ratio: 72.39
Change: 1.835 or 2.6%

Dow Industrial: 8,168.12
Change: -17.61 or -0.2%

US Dollar Index: 84.78
Change: 0.12 or 0.1%

STOCKS dropped a piddling 17.61 today to close at 8,168.12 (Dow) and 872.81, down 0.83
on the S&P500. this is not fatal, but it also ain't a breakout over the needful 8,200. Stocks are running out of time AND steam. Here's a guess: next move up, but not by much. 9,000 looks like the top of the rally, at most.

US DOLLAR INDEX rose today 11.5 basis points to close at a less than resplendent 84.781. Dollar's not making monetary history here, unless it be for being low bred and sorry. Expect lower prices.

YET despite a lower dollar generally, gold and silver can't break through resistance at 920 and 900 or 12.80 - 13.00. What gives?

For one thing, the Nice Government Men (who, for those of you who might miss my acid sarcasm, are not nice and not half men) are working overtime to talk down gold, dragging out that old "IMF gold sales" red herring and dragging that across the tracks of the dying dollar, to throw off gold investors. Let 'em sell all of it, I say, every last drop and speck, so they will no longer be able to hold it over the market and wage their propaganda war against gold. In its present state, the market would suck down that gold without a hiccup, like a 7-year-old sucking down a chocolate milkshake. Not even a burp. Yet we must deal with the ignorant, the unknowing, the naïve, the new players who don't see through this ploy.

This is all ye know, and all ye need to know: the yankee government is creating dollars as fast as its little computers will go, and will keep on doing that. More dollars to buy the same amount of silver and gold means eventually, higher prices, sure as anvils fall straight down from 747 Jumbo jets.

The GOLD PRICE today dropped 9.10, trading early in the day as low as 880.50, but it rallied back handily and closed above the critical 889 support.

The SILVER PRICE dropped 44.9 cents to close on Comex at $12.305. Low posted at $12.175.

This is the same old range trading, but it is not without danger. More times a market re-visits an area, more likely it is to break through, up or down. Both silver and gold need to get into gear and move up, not fast, but up.

A duty has arisen that will take me out of town on Monday, 4 May. I will return on 5 May, God willing.

Argentum et aurum comparanda sunt --
-- Silver and gold must be bought.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

© 2009, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

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.