Tuesday, June 09, 2009

As Long the Gold Price Holds Above 938 - 941.50 It Will be a Short Correction

Gold Price Close Today : 954.00
Change: 2.30 or 0.2%

Silver Price Close Today : 15.128
Change: 18.5 cents or 1.2%

Gold Silver Ratio: 63.06
Change: -0.627 or -1.0%

Dow Industrial: 8,763.06
Change: -1.43 or 0.0%

US Dollar Index: 79.86
Change: -0.96 or -1.2%

Imagine trying to manage the US Dollar. It's like coaching a high school football team. Sometimes your players do okay, but other times they come onto the field and ask what that pointy leather thing is. So the magnificent dollar dropped nearly 100 basis points today, below 80, to close at 79.861. Market is saying, "We don't trust you one bit. You're worse than a bad tooth or a rotten ankle, but we will run with you when we can, and against you when we can't." The dollar's growing untrustworthiness, of course, works wonders for good old reliable silver and gold.

STOCKS were a welter of confusion today, some indices up and some down, and we know that confused markets usually don't go anywhere, unless maybe it's down. Dow closed down 1.43 at 8,763.06, S&P up 3.29 at 942.43. It's really painful watching stocks. Stay out.

The Silver Price jumped up nearly 1.25% today, and has held above 14.80 cents. It rose 18.5 cents to 15.128. I know this volatility wears on the nerves, but it will pay off in the long run.

The gold price rose 2.30 to US$954 today. It remains above its 10 day moving average, while the silver price does not. I am really most closely watching that 938 - 941.50 support. As long as it holds above that, this will be a short correction.

Today's action shows that very few people trust the US dollar, but plenty trust silver and gold. Not much change there.

It's a bull market for silver and gold. Keep buying every chance you get.

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.