Tuesday, May 12, 2009

Silver and Gold Prices Could Get a Short, Sharp Rally

Gold Price Close Today : 923.50
Change: 10.50 or 1.2%

Silver Price Close Today : 14.195
Change: 30.5 cents or 2.2%

Gold Silver Ratio: 65.06
Change: -0.673 or -1.0%

Dow Industrial: 8,477.87
Change: 59.10 or 0.7%

US Dollar Index: 82.30
Change: -0.55 or -0.7%

broke through resistance today, but only barely. The Gold Price closed up $10.50, and over $920 to be sure, but only at $923.50. Equivocal, somewhat. The Silver Price broke through $14.00, rising 30-1/2 to $14.195 cents. Both these are peaks slightly higher than the last time metals visited these points. Tomorrow silver and gold must advance and close higher, or fall back. No equivocal performance will do.

What's curious about today is that the Nice Government Men either passed up a chance to smack silver and gold when they were at vulnerable resistance, or they smacked and it had no effect. It appears the latter explanation holds, which means we could get a short, sharp rally in metals.

The US DOLLAR INDEX got invited to the woodshed today and took a severe beating. It fell 54.6 basis points to 82.295. Dollar can fall to 78 before it stops. If it falls through 78, look for 70. But the fainting dollar can only help silver and gold prices, as it did today.

STOCKS were confused today -- some indices rose, others fell. Confused markets don't go anywhere. After a day or so of confusion, the Dow ought to start moving up again. Start getting out of any stocks you have left. Sell them on a scale up basis. By the time the Dow hits 9,000 - 9,400, you must have sold all of them.

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.