Tuesday, October 06, 2009

A Clean Breakout. The Gold Price is Targeting $1,325.

Gold Price Close Today : 1038.60
Change: 21.90 or 2.2%

Silver Price Close Today : 17.273
Change: 76.0 or 4.6%

Platinum Price Close Today: 1,315.20
Change: 20.00 or 1.5%

Palladium Price Close Today: 307.20
Change: 8.00 or 2.7%

Gold Silver Ratio Today: 60.13
Change: 1.242 or 2.1%

Dow Industrial: 9,731.25
Change: 131.50 or 1.4%

US Dollar Index: 76.33
Change: -0.32 or -0.4%

Today gold unleashed those seven league boots again, crashing right through $1,020 resistance and running to a high at $1,043.50. The GOLD PRICE closed up $21.90 at $1,038.60. Nope, that's not a misprint. It's also a clean breakout, so stop worrying and buy. This rise is targeting $1,325. Yes, I know how crazy that sounds, but do you know how crazy it feels, after 29 years in the silver and gold markets, to have to write "1-comma" before the gold price?

The SILVER PRICE slightly outperformed gold today, rising 76 cents to $17.2730 at Comex close, blasting through resistance at $16.50 and $17.00 like they were wet cardboard. Buy silver. That's all I can say.

But you know, the hard part here (as my friend and technical genius Bob warned me today) will be to convince people to hold on to their silver and gold. Falsely concluding that the metals have made their run, investors will want to sell now, at the very time silver and gold are fixing to run away upside.

I'm no Elliot Wave technician. I reckon I'm just not bright enough to understand it, but some things are obvious. Look at the silver or gold charts from 2001 through today. Stand across the room and ask, "What strikes your eye?" It will be the gigantic drop from March 2008 through November 2008 on both charts. Look closer and you can trace out a 1 up - 2 down - 3 up - 4 down - 5 up wave pattern topping in 2008.

What does that mean? Only that the first of what will be five waves in the bull market has been completed, corrected in a second wave down, and is now beginning the third wave up. And the third wave is never the shortest, and usually the most ferocious and turbulent of all three up-waves. Friends, we have just come through the longest and slowest part of a bull market, and are now entering the really wild times. Think of the US stock market after the 1987 crash until 2000, and you'll get an idea what I mean.

From Nov. 2001 at $4.02 silver rose to $20.57 in March 2008. That's a 511% increase, 5.11 times the beginning price. Now the next wave will move at least that far and should move further. Do the math, beginning at $8.80 last fall, and see what target you get. Right.

Mark, dear Readers, that although the Dow rose 131.5 points, today, the Dow in Gold Dollars still fell to G$193.69 (9.37 oz). Several of y'all wrote asking how to figure or keep up with the Dow in Gold Dollars. Easiest way is to follow the Dow in Gold Ounces, which will give you the same chart, just different numbers.

Today the US DOLLAR INDEX dropped another 30 basis points to close at 76.325. The scrofulous dollar has lost about 80 bps in the last three days. I have to laugh and make fun of it, otherwise the tragedy and train of horror that follows destroying a nation's currency would overwhelm me with tears. How many will suffer so that the rotten and greedy can hold on to power?

Thanks very much for your e-mails about praying
for my granddaughter Caroline Sanders when she
has heart surgery on 13 October. I deeply appreciate
your thoughtfulness.

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.