Monday, September 28, 2009

Expect Silver and Gold Prices to Show New All-Time Highs by Mid-November

Gold Price Close Today : 992.50
Change: 2.30 or 0.2%

Silver Price Close Today : 16.173
Change: 13.5 or 0.8%

Platinum Price Close Today: 1,286.00
Change: 0.0 or 0.0%

Palladium Price Close Today: 287.75
Change: -2.00 or -0.7%

Gold Silver Ratio Today: 61.37
Change: -0.373 or -0.6%

Dow Industrial: 9,789.36
Change: 124.17 or 1.3%

US Dollar Index: 76.94
Change: 0.35 or 0.5%

While I was vacationing 14 - 26 Sept. the GOLD PRICE muscled through US$1,000 to a new all time high above $1,020. Now it is correcting that run up (from $905) but should not sink lower than US$980, perhaps US$975 on a spike. This move ought not to last beyond the end of this week. A close below US$975 would change the outlook altogether. That's the technical picture.

Blowing a headwind against gold's course, the Federal Reserve, those Nice Government Men, are not inflating fast enough to keep the money supply growing. Of course that pushes the scrofulous US Dollar higher. Technically, the Dollar Index has completed a downleg and should now correct that previous downleg by rallying, maybe as high as the 50 day moving average (today about 78). None of this alters the longer term outlook for the scrofulous dollar, or for SILVER and GOLD PRICES. Long term the dollar is headed for the junk heap of debased currencies, and silver and gold prices are headed so much higher that if I mention numbers y'all would have me arrested for a lunatic and fit me for one of those jackets with sleeves that tie in the back.

The SILVER PRICE rode the roller coaster up with gold,reaching above $17.50. I've been telling y'all that silver will rise much faster than gold, and this was another example. Since it is a smaller market, the silver price is always more volatile, on the downside as well as the upside. Silver's correction might carry as low as $15.50, but not much further.

Today the silver price closed at $16.173, up 13.5 cents, while the gold price rose US$2.30 to US$992.50. I expect both markets to bottom by the end of next week, but from there they may spend as long as 4 - 6 weeks working sideways before they break out upwards. I expect both metals to show new all-time highs by mid-November.

STOCKS, proxied by the Dow, speak with fork├ęd tongue. Hard to read that chart, but I would guess the Dow will work higher before it collapses later this fall. Fall has whacked the Dow 7 out of the last 9 years. Not much to look forward to, but if y'all still have stocks left, even in an IRA or 401(k) or in mutual funds, sell them now.

Susan & I returned from vacation Saturday night,
and it was wonderful. Read my daughter Liberty's
version at this web address:
There are also pictures there, including one of the
entire Moneychanger family, less two sons & families.
After the beach at Fripp Island, Susan & I drove to
Charleston, then to Columbia for my speech. You
can purchase DVDs & MP3s at Name of the
speech is "Surviving Depression & Reviving
Local Economies." After Columbia Susan & I
worked our way to Cowpens & Kings Mountain
battlegrounds, through North Carolina, & on to
a church meeting in Lynchburg, Virginia. Wonderful
as it was, I am very glad to be home in Tennessee.

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.