Friday, July 17, 2009

This Week the Gold Price Rose 2.7% and the Silver Price Rose 6%

Gold Price Close Today : 937.20
Gold Price Close July 10 : 912.20
Change: 25.00 or 2.7%

Silver Price Close Today : 13.398
Silver Price Close July 10 : 12.637
Change: 76.10 cents or 6.0%

Platinum Price Close Today: 1,173.60
Platinum Price Close July 10 : 1,110.90
Change: 62.700 or 5.6%

Palladium Price Close Today: 249.00
Platinum Price Close July 10 : 232.90
Change: 16.100 or 6.9%

Gold Silver Ratio Today: 69.95
Gold Silver Ratio July 10 : 72.18
Change: -2.23 or -3.1%

Dow Industrial: 8,743.94
Dow Industrial July 10 : 8,146.52
Change: 597.420 or 7.3%

US Dollar Index: 79.478
US Dollar Index July 10 : 80.244
Change: -0.766 or -1.0%

The GOLD PRICE rose US$25 this week to US$937.20. W.o.w. Isn't that interesting, that gold rose exactly twenty-five dollars? That 2.7% rise took gold to the top of its trading range. It still needs to break through $940, then close higher for three days running -- something like $942, then $954, then $968 would be ideal. It's not yet clear and certain whether the gold price is rallying again or merely trading to the top of its range, fated to drop again. However, that's the greatest likelihood, that we've already seen the low and begun the Grand March to $1,000.

Here's what I love about silver. This week the Gold Price rose 2.7% and the Silver Price rose 6%. Yes, the SILVER PRICE really rose 76 cents this week to close at $13.398. To confirm gold's move fully silver must keep on advancing and close above $13.80, then $14.00 at a fairly quick step. Look for that next week. As long as the silver price remains above $13.00 and the gold price above $928, the rally is on track.

Keep on accumulating silver and gold. Buy the dips, or buy both metals on any gold breakout over $940.

Today I'll try to be subtle, although in truth the only gift I have is stating the obvious. Don't laugh at me too hard: in an age of Liars, Intimidation, and Cowards mine is a pretty valuable gift, and fairly rare.

Speaking of obvious, the US DOLLAR INDEX showed its strength this week by falling 76.6 basis points, closing the week below 80 at 79.478. The chart hardly allows any conclusion but a dollar rolling over to the downside, ready to lay down in the grave -- or drop 200 or so basis points anyway. As I have been begging you since spring 2001, get out of US Dollar denominated assets: CDs, bonds, annuities, bank deposits, anything that promises to pay future dollars. Hyperinflation is now a genuine possibility.

STOCKS, on the other hand, staged a miraculous resurrection this week, rising 597.42 to close the week at Dow 8,743.94. S&P added 61.25 points to close at 940.38. This is the Last-Train-Out-Of-Town rally I have been expecting since last fall. It is very strong -- strong enough to fool even the most practiced investors, so don't let it seduce you. Remember Ulysses and the Sirens. This is literally your last chance to get out of stocks and swap the proceeds into silver and gold. After a top around 9,700, look for stocks to break 6,000, unless Bernanke and his Fed Bumblers manage to put the dollar into hyperinflation. Even then, silver and gold would vastly outperform stocks.

The DOW IN GOLD DOLLARS deserves a look. It has once again (thanks to stocks' strength this week) traded up to G$193(9.336 oz). Since April this level has acted like the Escarpment in Tarzan movies, throwing back all attempts to scale it. It the DiG$ breaks G$193, it will run to G$215 (10.401 oz) or to the 200 day moving average G$201 (9.722 oz). That brief outperformance of gold would add fuel to the stock-rally frenzy, but keep on reminding yourself that this is merely a typical bear market rally, sudden, sharp, and short. Don't let stocks sucker you!

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.