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Friday, January 30, 2009

The Gold Price Will Shortly Break US$1,000

Gold Price Close Today : $927.30
Gold Price Close 23rd Jan: $895.30
Change: 32 or 3.6%

Silver Price Close Today : $12.56
Silver Price Close 23rd Jan: $11.932
Change: 62.8 cents or 5.3%

Gold Silver Ratio: 73.83
Gold Silver Ratio 23rd Jan: 75.03
Change: -1.20 or -1.6%

Dow Industrial: 8,000.86
Dow 23rd Jan: 8,077.56
Change: -76.700 or -0.9%

US Dollar Index Today: 85.946
US Dollar Index 23rd Jan: 85.472
Change: 0.474 or 0.6%

Last Friday I said I as expecting gold to challenge $920 this week, but I wasn't really expecting it to burst through, as it did today. As I muse and ponder silver and gold strength, what stands out is the US Dollar Index. It rose this week, yes, rose, but that didn't bother silver or gold a bit. The gold price rose US$32 (3.6%) and the silver price rose 62.8 cents (5.3%). Whenever I see silver and gold unintimidated by a rising dollar, I know some wiry strength lies under the market. If the dollar intends to rally to 88, it sure is keeping its friends in the dark. Two outcomes are likely from here: it rallies to 88, where it fails, or, it fails after closing below its 50 DMA, about 84. Either way, guess what? It fails. Get out of dollars, and all investments that promise to pay you dollars in the future.

STOCKS are just so sick they can't rise up off their bed of pain. The Dow in Gold Dollars, my measurement of the Dow by gold, dropped G$8.15 this week (0.394 oz) to a new low of G$178.36 (8.628). Odd here is that it has traded into a "falling wedge" formation, which usually resolves by breaking out to the upside. Here, the DiG$ is trying to break out downside. If it follows thru lower on Monday, the ultra-reliable DiG$ is telling us that gold is about to wildly outperform stocks, and stocks are going to sink much lower. If we ever see stocks rally, sell all you got.

"Tawdry" isn't a word I get to use very often, but it flew to mind when I looked at the Dow right at closing. It lay there gasping for air, 15 points beneath 8000, was below 8000 at closing, but the settlement -- O miracle of miracles -- came in at 8,000.86. Tawdry.

As I suspected last week, the gold price did a "touchback" toward the breakout point, but never got lower than $875. Then yesterday the gold price staged the first half of a key reversal, and scored the second half today with a higher -- much higher -- close. Beware -- plenty of resistance lies between here and $950, so next week will be tough. Doubt not that the "yaller metal" has caught the attention of the Nice Government Men trying to manipulate the dollar, the economy, and your future, and they're likely to mount an attack whenever they view gold as overextended and vulnerable.

I just don't know -- whether the gold price will breach $940 and run on through US$1,000 on this first try, or whether it will need a couple of tries. I do know that the gold price will shortly break that US$1,000, I just don't know how quickly.

Look at silver's chart, It has traced out a saucer or rounding bottom. The rim stands around $13.50. It may bounce trying to break through that rim, but break through it will.



The Experts Speak. (I love doing this.) "This is the time to buy stocks. This is the time to recall the words of the late JP Morgan that any man who is bearish on the United States will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years." R.W. McNeel, dir. Of McNeel Financial Service, 30 October 1929.

And how about this one, pure, 100% high grade Blarney:

"I see nothing in the present situation that is either menacing or warrants pessimism. . . I have every confidence there will be a revival of activity in the spring, and that during this coming year the country will make steady progress." -- Andrew W. Mellon, US Secretary of the Treasury, 31 December 1929.

Remember, there's only one way to tell when government officials are lying: there lips are moving.

Y'all have a great weekend.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Thursday, January 29, 2009

Silver and Gold Prices Were Strong Today in the Face of US Dollar Index Strength

Gold Price Close Today : $905.10
Change: 16.90 or 1.9%

Silver Price Close Today : $12.140
Change: 18.2 cents or 1.5%

Gold Silver Ratio: 74.56
Change: 0.279 or 0.4%

Dow Industrial: 8,149.80
Change: -225.65 or -2.7%

US Dollar Index Today: 85.29
Change: 0.72 or 0.9%

I've been wondering all week why silver was refusing to follow gold and drop. Today, gold explained. After dropping for five days, gold today turned around and performed the first half of a key reversal (break into new low ground with a higher close on the day, followed by a higher close next day).

After a low today at 873.95, gold closed higher at 905.10. Then in the aftermarket it climbed another 3.50. Silver closed higher than yesterday, at 12.14 (up 18.2 cents then jumped to a new high in the aftermarket. Whatever it means, at least silver and gold ought to rise further tomorrow. Gold needs to close above US908.50 tomorrow (last high) to put the second half of the key reversal into place. Silver and gold prices were strong today in the face of US Dollar Index strength as well.

If it weren't for the Nice Government Men on the Plunge Protection Team, I don't reckon anybody at all would be buying stocks. They have a good day, rise a couple of hundred points even, then fall back that much or more next day. Natural markets don't act this way. Y'all smell something?

The Experts Speak: "When the US govenrment stops wasting our resources by trying o maintain the price of gold, its price will sink to . . . $6 an ounce rather than the currency $35 an ounce." -- Henry Reuss, Chmn. Of the Joint Economic Committee of Congress, 25 Nov. 1967.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Monday, January 26, 2009

The Gold Price is on Track to Challenge $920-$940 by Month's End

Gold Price Close Today : $908.50
Change: 13.20 or 1.5%

Silver Price Close Today : $12.102
Change: 17 cents or 1.4%

Gold Silver Ratio: 75.07
Change: 0.037 or -0.7%

Dow Industrial: 8,116.03
Change: 38.47 or 0.5%

US Dollar Index Today: 85.47
Change: -0.03 or 0.0%

Gold and Silver Prices extended last week's gain today. The silver price jumped 17 cents to $12.102 and the gold price jumped 13.20 to US$908.50. The gold price is on track to challenge $920-$940 by month's end. Silver faces a tiny resistance at $12.50, but really targets $14.00. The $920-$940 area was last July's top, so when gold clears that barrier, it will draw lots of attention and scoot even faster.

Pause for a moment to ponder with me the gravity driven trajectory of the Dow In Gold Dollars. Y'all will recall that this measures the value of the Dow Jones Industrial Average in "dollars" of gold (0.0483 troy oz), which gives us one unchanging measure of the Dow back to its birth in 1896. That measure has now broken the longstanding G$200 (9.646 oz) mark and sunk to G$184.67 (8.907 oz). To remind you LO! How the mighty have fallen! The DiG$'s high came in August 1999 at G$925.42 (44.767 oz). The DiG$ is the most reliable indicator I use. Before the end of the bull market in gold/bear market in stocks, one to two ounces of gold (G$20.672 to G$41.344) will buy the entire Dow.

Perhaps this makes it easier to understand why I have recommended so long that y'all swap stocks for silver and gold.

US DOLLAR INDEX answered our questions today by dropping 82 basis points, then another 30 basis points (total 112) by 4:45 central time, while I am writing this. News of a gazillion lay-offs today helped the dollar not at all. Dropped back to 50 Day Moving average at 84.21. If it falls through that, it will negate the idea the Dollar Index will rally to 88.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Friday, January 23, 2009

The Gold Price Not Only Crossed 857 Resistance, but Blew Right Past 880 to 900, Quicker Than a Fox Can Cross a Road

Gold Price Close Today : $895.30
Change: 37.10 or 4.3%

Silver Price Close Today : $11.932
Change: 57 cents or 5.1%

Gold Silver Ratio: 75.03
Change: -0.532 or -0.7%

Dow Industrial: 8,077.56
Change: -45.24 or -0.6%

US Dollar Index Today: 85.47


Whoa! I knew that silver & gold were under a lot of pressure, and I expected a quick rise, but nothing had prepared me for today.


Gold today burst its sublunary bonds and flew skyward. A US$37.50 one-day rise is stout by any measure, stouter since the gold price not only crossed 857 resistance, but blew right past 880 to 900, quicker than a fox can cross a road. High was 903.50, but at the close it settled back to US$895.30. That gigantic rise whispers to me that huge buying power underlies the gold market, and shorts are scared to death.

I buy breakouts over longtime resistance, so I bought gold today. Now frequently after a breakout a market will touchback, same way in baseball the runner has to touch back to base on a fly hit. That might happen on Monday - Tuesday, but don't let that worry you. The breakout occurred today, and that cat can't be put back in the sack.

Logically the gold price should rise strongly next week, challenging 920.

SILVER performed as brilliantly as gold today, rising 57.5 cents. It blew past 11.50 and through 11.80 all the way to 12.08 before it slowed. Closed at 11.932. Very little resistance stands between here and 14.00, so next week silver ought to rise very strongly.

More and more now it becomes plain that last spring's peak in silver and gold was the peak of the first wave up in the bull market. This correction has been long and violent, sharpened by the financial crisis, but now the lows are behind us and a rally has begun that should carry into late spring and take gold above US$1,200 and silver -- who knows where? -- $28.00 or more.

Against silver and gold both the US dollar and stocks will continue to lose value, probably for at least 6 more years.

Odd, you can search for specific news items that might have acted as catalysts for today's moves somehow, but find nothing. Nothing, that is, except the by-now usual litany of disasters, bankruptcies, and defalcations. Today Canifornia is about to be foreclosed by whomever owns the mortgage. GE's profits dropped a modest 46%. Harley-Davidson is cutting 85 jobs (how did that rate a mention?). Fiat, the car we used to laugh at, is about to take over Chrysler, and Aflac needs capital so badly they're thinking about auctioning off the duck.

Never mind the news. The US DOLLAR INDEX, whose rise we have watched with as much confidence as mouse has in a cat's humanitarianism (mousatarianism?), stalled today and lost 3 basis points, basically a double close. Double closes often signal turnarounds. Technically the Dollar Index could reach the last high at 88, but I suspect it will stop before that point. In any event, I expect the dollar's rally to end by end-January.

Stocks appear confused today, with the Dow closing lower and the S&P rising, but a glance at the 5-day chart for the Dow this week blows away the confusion. Today made a low slightly lower than Wednesday's. The Dow has traced out a reverse head & shoulders, and save for the details, so has the S&P500. Next week should be much kinder to stocks. I continue to expect a 4 -6 month rally, which will give you your last chance to dump stocks at any price near 10,000.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Thursday, January 22, 2009

The Gold Price Shows a Firm Uptrend Channel

Gold Price Close Today : $858.20
Change: 8.60 or 1%

Silver Price Close Today : $11.357
Change: 4.2 cents or 0.4%

Gold Silver Ratio: 75.57
Change: 0.480 or 0.6%

Dow Industrial: 8,122.80
Change: -105.30 or -1.3%

US Dollar Index Today: 85.51
Change: 0.26 or 0.3%


The GOLD PRICE shows a firm uptrend channel. Last low touched 50 DA (thank you very much!) and today gold close above its 200 DMA (853.89) at US$858.20, up 8.60. That 200 DMA is a crucial milestone. Another milestone is a close above 857, but not nearly far enough above 857 to suit me. If it has conquered that resistance, tomorrow will be a strong day. The real battle ahead is for gold to conquer 885 and 920+.

Believe me, this will be a fight. When gold passes 920, though, the enemy will flee like mist before the mighty sun.

How significant is the 11.50 barrier for the silver price?There's no resistance above it until 14.00. The 200 DMA is also clue there at 13.83. Only a close below 10.50 will turn silver's picture sour.

Supply has improved for both silver and gold, but in general premiums have not fallen much. From time to time I can buy at favorable premiums, as with Krugerands right now.

But very shortly that supply disappears and premium climbs again. What does it mean? Short supply is not a sign of weak demand.

When I gaze upon the Dow chart, only one thought crosses my mind: "How glad I am somebody else owns that!" Where will a rally come from? Why build that long diving board formation unless somebody is going to take a dive? Add more woe: Other indicators are pointing down. There's little sign of life in stocks. Rally must start soon, if ever.

Markets are so contrary, and the US DOLLAR Index is living proof of that. With all its crazy swings, it has broken out to the upside, through the down trend line, with a target of 88 (max, I expect). Expect this rally to expire with January. Interesting is this: in spite of the dollar index rising 26 basis points, both silver and gold prices rose today. Dollar's wind will have to blow more fiercely, freeze more boldly, to stop those metals.


Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Wednesday, January 21, 2009

The Gold Price is Fighting its Way Thru US$850 - $857 Resistance

Gold Price Close Today : $849.60
Change: -5.0 or -0.6%

Silver Price Close Today : $11.315
Change: 15.7 cents or 1.4%

Gold Silver Ratio: 75.09
Change: -1.505 or -2.0%

Dow Industrial: 8,228.10
Change: 279.01 or 3.5%

US Dollar Index Today: 85.37
Change: -0.98 or -1.1%

Silver and gold prices had another forked tongue day, with the gold price falling US$5 to US$849.60 and the silver price rising 15.7 cents to $11.315 an ounce. I don't know about y'all, but that gold price, at 40 cents under the critical $850 resistance, looks as pure, innocent, truthful, and sober as a wino with Ripple on his breath. Appears more doubtful yet when the aftermarket rises 4-5 bucks.

Boils down to this: the gold price is fighting its way thru US$850 - $857 resistance, and it's a hard fight. Lots of sellers don't believe gold can -- or don't want gold to -- break out toward US$1,000. Be patient, be patient, we have time and a bull market and the Fed and the US Treasury on our side. Can gold break down further? Sure, it could -- could drop $200 and still be in a bull market, but more likely is gold over US$900 by month's end.

Silver is fighting a resistance battle, too. Fight here is to pierce $11.50 - $11.80, with resistance from $11.25 to $11.35 along the way. Whenever a market slows down, there's a danger it will fall further back. I think on that, but remain persuaded that we saw silver's (and gold's) bottom back in November at $880. I keep on buying. Yes, it makes me nervous that silver has not yet surmounted $11.80, but every bull market climbs a wall of worry. Silver's no different here and now.

Well, if yesterday saw the feel-good Obama rally, today saw the hangover Obama fall. The US Dollar Index gained 82 basis points yesterday, and fell 98 basis points today. Friends, this is not a currency market, this is a crap-shoot. What in the world could make a currency whiplash like that? Something we're not seeing, or has every market now been systemically infected with panic and emotion driven trading? Now who knows where we are with the buck? Yesterday appears to have been an overshoot based on the inauguration, today the reaction. But what tomorrow?

Long term we all know the dollar will drop, thanks to the gigantic dose of inflation already infused, but what in the short term? Never mind, for in the long term fundamentals will rule.

Dow lost 332 yesterday, gained back 279 today, up 3.5%, while S&P500 rose 4.3%. Once again, we are replacing "markets" with "crap tables." Odd, indeed, that good old silver and gold, which all the croakers and stock salesmen want to point to as "too volatile," appear steady as Carey Nation in a saloon, compared to other markets.

By the way, latest balloon has developed in the US treasury paper market, driving yields down near zero. This ain't the Great Depression, nor is it Japan 1990 - 2000. The lemmings will find themselves falling over this cliff, just like the real estate and tech stock boom cliffs before.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Tuesday, January 20, 2009

The Gold Price Should Make a Breakout this Week, and Push US$900 - $920 by End January

Gold Price Close Today : $854.60
Change: 15.30 or 1.8%

Silver Price Close Today : $11.158
Change: -3.7 cents or -0.3%

Gold Silver Ratio: 76.59
Change: 1.620 or 2.2%

Dow Industrial: 7,949.09
Change: -332.13 or -4.0%

US Dollar Index Today: 86.39
Change: 0.82 or 1.0%

The GOLD PRICE closed above $850 today, at US$854.40, up $15.30 but not quite breaking out yet. Needs to close over US$858 for that. The gold price should make that breakout this week, and push US$900 - $920 by end-January.

Yes, buy gold now.

The SILVER PRICE was the forked tongue today, down 3.7 cents at $11.158. Now I'm not thrilled by that, but look where it was last week, and you'll realize it's actually much higher. All this back and forth is just talk and wasting ammunition until silver closes above $11.50. Tomorrow it ought/must climb above $11.25.

"Buy the rumour, sell the news" seems the market proverb the stock market was operating on today. In spite of the Obama-ramalama dawning of a New Age of Change, stock investors all ran for the exits. Dow in Gold Dollars (Dow measured by gold) sank to a new low, G$192.28 (9.302 oz). Unless stocks gain traction and reverse tomorrow, much more downside is coming, hard.

US DOLLAR INDEX has broken out to the upside, closing today at 86.32, up 82 basis points. Look for a run to the last high at 88, and then a collapse. High dollar exchange rate is like poking Bust-up Ben Bernanke and the new crooked Secy. Of Treasury with a sharp, burning stick. Rest assured they will stop it and reverse the dollar.

Whoa! Here's a surprise. We haven't had a ready supply of ten oz. silver bars since August, yet we bought some today. If you want to buy at least twenty ten oz. bars (200 oz), send us an e-mail at moneychanger@wildblue.net We're selling them based on current spot silver, $11.18, for US$140.20 per bar or $2,829 delivered per order. Sorry, no orders for less than 200 oz. We will enter orders beginning with the first e-mail received until supply is exhausted. Offer expires at 10:00 a.m. Central time, 21 January. Please include your name, address, phone number and mention goldprice.org in your e-mail.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Friday, January 16, 2009

Today Silver and Gold Prices Put in the Second Half of the Key Reversal, Closing Higher -- Much Higher

Gold Price Close Today : $839.30
Change: 32.60 or 4.0%

Silver Price Close Today : $11.195
Change: 77.5 cents or 7.4%

Gold Silver Ratio: 74.97
Change: -2.447 or -3.2%

Dow Industrial: 8,281.22
Change: 68.73 or 0.8%

US Dollar Index Today: 83.89

Good week for silver and gold prices, not so good for stocks and the US Dollar.

SILVER and GOLD PRICES completed the second half of their key reversal today. Once again, the key reversal began yesterday not with the Comex close, but in the aftermarket: a break into new low ground with a higher close. Today Silver and Gold Prices put in the second half of the key reversal, closing higher -- much higher, in fact. Both silver and gold dropped until they touched their 50 day moving averages, a common correction, and then they bounced. Apparently a lot of buyers were waiting to see that price. Silver has drawn out a big, rounding bottom, very reliable bottoming formation.

Both silver and gold prices will move higher next week. Silver needs to best $11.50 - $11.80, then $13.80. The gold price must fight through US$857, but the greater target is US880. Better buy silver and gold now.

News today was all upbeat. California is delaying paying tax overpayment refunds because it's out of money. Circuit City is bankrupt and selling out. Citicorp is splitting up, and as a reward for its complete incompetence, the Fed announced it would guarantee $278 billion of its sorry assets. Bank of America got $20 billion from the government, and guarantees for another $118 billion. Merril Lynch, which BoA gobbled down, announced it has lost $39.1 billion in the last six quarters. As Hi said in Raising Arizona, "Over here you've got favoritism, and then there's who you know." That explains why the Fed & Treasury are pounding so many billions down these rat holes.

Stocks closed up 68.73 points today. Not an inspiring performance, but glancing at the chart for the last 3 days, the Dow has traced out a reverse head and shoulders. As weak as its response has been, I have to count that a reversal to the upside. Next week should see stocks rallying. I'm still looking for a 4 - 6 month rally, which will hand you your very last chance to get out of stocks. Take it.

US DOLLAR INDEX reached its 50 day moving average (84.86) this week and promptly collapsed. That probably marks the end of the dollar's rally. For my money, look for a lower dollar this month.

And for your entertainment today, here are some pronouncements of the experts about the last Great Depression.

On 25 October 1929, from Goodbody & Co.'s market letter to customers: "We feel that fundamentally Wall Street is sound, & that for people who can afford to pay for them outright, good stocks are cheap at these prices."

And in December 1929 the US Dept. of Labor, in it New Year's forecast, said, "1930 will be a splendid employment year."

And from the Harvard Economic Society on 20 September 1930, "Recovery will soon be evident."

Now y'all remember those statements next time you hear Bail-out Ben Bernanke and the next Secretary of the Treasury & Wall St. gurus shooting their blarney cannons at you. There's one sure fire thing that gives them away when they are lying: their lips are moving.

And, thinking about the inauguration next week, we note that on this day in 1547 Ivan the Terrible was crowned as the first of Russia's tsars.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Thursday, January 15, 2009

If Gold and Silver Prices Close Higher Tomorrow, I Would Call that a Bottom

Gold Price Close Today : $806.70
Change: -1.50 or -0.2%

Silver Price Close Today : $10.420
Change: -3.2 cents or -0.3%

Gold Silver Ratio: 77.42
Change: 0.094 or 0.1%

Dow Industrial: 8,186.60
Change: -13.54 or -0.2%

US Dollar Index Today: 84.54
Change: 0.15 or 0.2%

SILVER and GOLD PRICES behaved oddly today, as they did at their bottoms in November. At the Comex closes the gold price was down $1.50 to $806.70 and silver down 3.2 cents to $10.42. But without any special news, both rose dramatically in the aftermarket, gold to $815.90 and silver to $10.565. That would have been a key reversal, had those aftermarket prices appeared at the closes. Last time metals turned the first half of the key reversal took place the same way, i.e., break into new low territory with prices in the aftermarket above the previous day's close. If gold and silver prices close higher tomorrow, I would call that a bottom.

One of America's greatest men of the last 100 years passed away last night: Charles Walters, founder of Acres USA. If there is a biodynamic and organic farm movement alive today, it can thank Charles Walters for the favour. He was a journalist, but truly a man for all seasons: economist, agronomist, thinker, humorist, elegant stylist. God granted me the privilege of knowing and learning from his these last few years. I will miss him terribly. This world will miss him more. Requiescat in pace.

The stock market today staged a very dodgy performance, breaking to a new low for the move at 7,995, then "discovering" that stocks were a great buy, rallying 200 points to close at 8,186.60. Yet that close was 13.54 points lower than yesterday. Technically, that's not a great showing. You'd expect a genuine rally to break to a new low first, then close the day higher. To break to a new low, then close the day lower, well, that's just . . . sorry. Weak. And it looks suspiciously like the Invisible Hand (read: government's Plunge Protection Team) was leading the buying.

Whence arose the fear in Stock-land? Bank of America has indigestion from gobbling down Merrill, and having received a chintzy $25 million only from the government so far, has gone back to the trough to stick its snoot in for another $15 billion. BoA shares today fell 14% after dropping 27% already this month. Rumor whispers that BoA needs $200 to $300 billion to rise above the waterline. The bailout are nowhere near finished.

US DOLLAR INDEX has slowed down its rally, down in the 15 - 18 basis points a day range. Within next two weeks the dollar will turn down again.


Stay warm. It's supposed to hit 8 degrees F. here tonight. Throw another log on the fire!


Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Wednesday, January 14, 2009

This Ought to be the Last Leg Down of the Gold Price Correction

Gold Price Close Today : $808.20
Change: -11.90 or -1.5%

Silver Price Close Today : $10.452
Change: -20.3 cents or -1.9%

Gold Silver Ratio: 77.32
Change: 0.356 or 0.5%

Dow Industrial: 8,200.14
Change: -248.42 or -2.9%

US Dollar Index Today: 84.44
Change: 0.18 or 0.2%


Compared to the Dow, gold has no problem. This ought to be the last leg down of the gold price correction, backstopped by the 50 day moving average at $803.70 and round number $800. Possible gold could break to $780 on a spike, but only possible. Time is working on gold's side here. Longer it goes without breaking 800, less the chance it will.

Is it scary? No joke. Since July gold has drawn out a series of declining tops. To prove it isn't going to drop forever, it needs to close above $885, then $940. Scared or not, I'm going with the primary uptrend. Gold's bull market only began in 2001, and 8 years isn't long enough for a bull market, not by half. Besides, here we are ruminating about where gold will go in the next few days, while ignoring that it stands about 3-1/4 times above where it began.

Fascinating thing about "scary" is that it usually is accompanied by "paralyzed." Our minds may analyze the situation correctly, and know we ought to act (buy) when the price drops and we're scared, but hardly one person in a hundred does that.

The SILVER PRICE has done no more than drop down to its 50 DMA (now $10.29) and the uptrend line. I expect this $10.50 area (closed today at $10.45) is where silver will begin to fight much harder. Chance always exists silver might break and re-visit $9.00. Watch $10.25 - $10.50.

I may be crazy, but I am buying silver all the way down.

Sharp falls, sharp rallies. The US DOLLAR INDEX continues to rally, although I suspect it's rallying days are numbered. Mildly amusing to note that yields on US government debt have been driven near to zero by the "flight to safety." Can y'all imagine that? People -- smart people, people with money -- actually believe that running to the debt of the greatest welcher and counterfeiter in mankind's history, the US government, denominated in the most overvalued currency in the world, the US Dollar, is a "safe" place to hide! Hide from what? Uhh, well, all the financial chaos caused by the Great Counterfeiter and its rotten currency. If any of this makes sense to y'all, then let me know how.

Looking at the chart, what great things hath the Dollar Index wrought? It has climbed back up to its 50 day moving average. Not yet a runaway bull market. Oh, yes, it also filled a gap left when it fell so fast in December. Standard stuff.

Mercy me, I don't know about that Dow Jones Industrial Average! Close today at 8200 was about as low as it can go and remain breathing. If it spikes down to 7750, then 'twill have to rise right back up and rally strongly. I believe than stocks will rally into the spring, but on faith only, and just barely on the chart. Stinks. Y'all sell stocks whenever you get the chance, certainly at any price above Dow 10,000.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Monday, January 12, 2009

The Gold Price Dropped US$34 to Close at 820.30, the Bottom Line Support

Gold Price Close Today : $820.30
Change: -34 or -4.0%

Silver Price Close Today : $10.725
Change: -57 cents or -5%

Gold Silver Ratio: 76.48
Change: 0.850 or 1.1%

Dow Industrial: 8,473.97
Change: -125.21 or -1.5%

US Dollar Index Today: 83.20

We've been renovating our office, and with all the furniture moved out and changing computer systems, we haven't been to contact -- sorry. In cleaning out some old files I came across charts and tables from June 2002, when I was trying to figure how far gold might correct from its US$327.80 high, after the 15 February 2001 low. Would it drop to 300? Or 291.45? Or 282.90?

Guess what? The difference between gold at $327.80 and gold at $282.90 looks ridiculous today. I would be glad to brag that I bought at either price.

What's the point? That a rising tide raises all boats, and a bull market makes good mistakes of timing. For a bull market (primary uptrend) the best strategy is to buy, and keep on buying. Over time, the little zigs & zags in price just won't make that much difference.

More: don't confuse short term price movements, meaningless noise, with long term price movements that signal trend changes.

The GOLD PRICE dropped US$34 to close at 820.30, the bottom line support I warned last Thursday was possible. Silver closed at $10.725, down 57 cents, and then fell further in the aftermarket to the $10.50 support I was watching. This could mark the lowest extent of the metals' decline, or they might drop a little lower. As long as they don't drop much lower, say 25 cents for silver and US$10 for gold, no great damage will be done. Of course, this is the sort of situation where you can stare at a chart and imagine all sorts of horrors. Back off! Relax! This correction should have ended by the end of this week. In a bull market, every price decline offers you another opportunity to buy. Take it this week.

On expectations that the European Central Bank will be forced to lower interest rates -- and with Spain's credit rating about to be lowered -- the dollar hit a one-month high against the euro and yen. That doesn't help gold, silver, or stocks. However, when you look at the chart, nothing dramatic has happened with the dollar. Yes, it's rallying, but that should end this week.

STOCKS continued to lean over the abyss. If they break through 8300 - 8200, look out. Continuing weakness makes stocks look even worse, when they long ago ought to have begun rallying.


Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Friday, January 09, 2009

Much Higher Prices are Coming Confusion and Fear Reign Across All Markets and that is Draining Energy out of Silver and Gold Too

Gold Price Close Today : $854.30
Change: 0.40 or 0.0%

Silver Price Close Today : $11.295
Change: 22.3 cents or 2.0%

Gold Silver Ratio: 75.64
Change: -1.487 or -1.9%

Dow Industrial: 8,745.57
Change: -143.28 or -1.6%

US Dollar Index Today: 82.48

The last week has left me feeling like a fool at a tennis match, wearing out his neck watching the ball flip from side to side without any outcome. Back and forth, back and forth, but no resolving outcome. Dollar up, dollar down, stocks up, stocks down, metals up, metals down. So what?

Stocks first: they failed at 9000 Dow this week, & that's not what you'd call a superb performance. Dow close below 8200 would be fatal, breaking stocks' backs for a new fall off the cliff. Once Obamaramalama is inaugurated, a short period of good feelings will follow, a few days anyway, in which stocks will float. I still expect that 4 - 6 month rally.

US DOLLAR INDEX, in spite of today's jump up 88 basis points to 82.483, is locked in a downtrend. Only a close above 88 could save it, and that's not likely.

GOLD ended the week in a place that is not terribly re-assuring. It needs to close above 860 first, then 880 to break out of this consolidation area. The week has been spent wasting gas going back and forth from 840 to 857, with no progress.

SILVER has behaved much the same, rocking between 1100 cents and 1150. Here, too, we need a break through, crashing the barrier at 1150.

Be patient with both. Much higher prices are coming, & soon. Confusion and fear reign across all markets, and that is draining energy out of silver and gold, too.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Thursday, January 08, 2009

Gold Could See $20 Drops that Scare You to Death, or Could Jump $30 Tomorrow - Buy on Any Decline, or Any Close Above 880

Gold Price Close Today : $853.9
Change: 12.8 or 1.50%

Silver Price Close Today : $11.072
Change: -0.008 cents or -0.10%

Gold Silver Ratio: 77.12
Change: 1.211 or 1.60%

Dow Industrial: 8,745.57
Change: -24.13 or -0.30%

US Dollar Index Today: 81.63

Confused markets don't do great things. The GOLD PRICE cannot hold above its 200 DMA (857.67), closing up today 12.80, but still below 200 DMA. I suspect both 25 year resistance at $850 and the 200 DMA are tempting smarties to short gold. Present weakness shouldn't last more than a week and shouldn't dip below $820, if that far. A close above $880 signals the weakness has ended, a close below $830 that it will be extended.

Other indicators are equivocal or weak. Be cautious here. The gold price could see $20 drops that scare you to death, or could jump $30 tomorrow. Buy on any decline, or any close above $880.

The SILVER PRICE has held on stubbornly above $11.00, a good sign. Unlike gold, silver is moving up out of a great rounding bottom (reaching back to September) and lies a long way beneath its 200 DMA (now 1418). The barrier silver must crush is $11.50, so a close above that will signal that silver has begun to rally again. Beneath that $10.90 must hold. This is a frustrating sideways fight to break through resistance, but the silver will eventually win. Good time to buy - no guts, no glory.

The US DOLLAR INDEX could not quite reach its 50 day moving average (84.46) before peaking and starting down again. It made a triple top in October - December. This rally-ette from mid-December has failed and turned down. Give it another couple of days and it will turn up again, rise to complete the correction, then resume its fall. Get out of all investments that promise to pay you dollars in the future.

STOCKS spake with forked tongue today, the Dow falling by 24 to 8745.57 while the S&P500 rose 2.56 to 909.21. Dow remains above 50 DMA (8,677) but must climb over 9000. Be patient, 'twill rally & give you a chance to sell the rest of your stocks.

I'll try to get back from Nashville in time for a commentary tomorrow, but may not make it. I have to take Susan to see her heart surgeon. She did a 48-hour monitor this week, and if she passed it, they'll take her off rat-poison (coumadin) and all her other medication. Thank you from all your prayers on her behalf.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Wednesday, January 07, 2009

Good Support for the Gold Price From $840 Down to $820, so we Have a Correction but not a Disaster

Gold Price Close Today : $841.10
Change: -24.30 or -2.8%

Silver Price Close Today : $11.080
Change: -34 cents or -3.0%

Gold Silver Ratio: 75.91
Change: 0.132 or 0.2%

Dow Industrials: 8769.70
Change: -245.40 or -2.7%

US Dollar Index Today: 82.25
Change: -0.59 or -0.7%

What a day! It all fell: stocks, dollar, silver, gold, oil. Why? Take your pick. Maybe it was Obamaramalama's $1.2 projected deficit, or crude oil down 12%, or panic taking over stocks, or the Fed enlarging its "facility" to bail out money market funds. Any of those would have been enough to turn me off of stocks and the dollar, but why silver and gold?

SILVER and GOLD PRICES, having failed to break through the chains of $850, today turned and went the other direction. However, the gold price closed at $841.10, down $24.30 (down 2.8%) which isn't too frightful. There is good support for the gold price from $840 down to $820, so we have a correction but not a disaster. Be patient.

The SILVER PRICE dropped 34 cents today (3%) to $11.08. As long as it stays above $10.90 this weakness won't last long. Look on it as an opportunity to buy silver on the cheap.

Speaking of that, I bought something today I haven't seen in more than 5 months: ten oz. silver bars. I bought 20 of them and will sell them all in one lot for $140.50 a bar, or $2,810 for the lot, plus $25 shipping ($2,835 total). First e-mail to moneychanger@wildblue.net wins the lot. Please mention goldprice.org in your email.

On news that jobs cut in December were more than expected, stocks lost most of the ground they had gained this year. That 9,000 resistance is tough. Be patient, I think they are just working their way up in a rally, and every market zigs and zags. Look for higher prices to sell remaining stocks.

The US DOLLAR dropped 65 basis points today, not huge by today's manic standards, but sizeable. I couldn't find any special news items that might have smacked the dollar. So much for the theory that stocks & metals always run opposite to the dollar.


Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Tuesday, January 06, 2009

Silver and Gold Prices Impressively Fought Off Another Attack Today

Gold Price Close Today : $865.40
Change: 8.20 or 1.0%

Silver Price Close Today : $11.42
Change: 17.5 cents or 1.6%

Gold Silver Ratio: 75.78
Change: -0.450 or -0.6%

Dow Industrials: 9,025.10
Change: 62.21 or 0.7%

US Dollar Index Today: 82.79
Change: 0.19 or 0.2%

Who's afraid of the big bad dollar? Not stocks or silver or gold, at least not today. Today the US DOLLAR INDEX rose 18.8 basis points, but it might as well have been rising on the moon for all other markets cared. The point? The dollar remains in an upward rally in a downtrend, and its days are numbered. Panic is over, need for dollar liquidity is vanished, hangover from inflation is hitting, and dollar is resuming its trajectory toward the center of the earth.

SILVER and GOLD PRICES
impressively fought off another attack today. The gold price broke below $850, allegedly down to $838.50 (I never saw it that low), while silver hit $10.75 (I never saw that either), but both closed the day much higher, the silver price up 17.50 at $11.42 and the gold price up $8.20 at US$865.40.

What jumps out at you from those closes? That gold remained above $850 support and silver above 11.25/11.30. The shorts have now wasted a lot of ammunition in the past 2 days trying to break metals, without success. Now they have fistfuls of losing positions, which will lose even more as silver and gold prices keep on climbing.

That means at some point we have a price piƱata in our future when these shorts panic out of their position, yelling "Buy it for whatever you have to pay!" That day will witness big jumps in silver and gold prices.

And that should happen soon. Resistance above silver until $13.50 is like the earth's atmosphere above 30,000 feet -- very thin. Look for big jumps when silver finally and permanently closes above $11.50 - $11.80.

STOCKS finally closed over Dow 9,000 at 9,025.10. They'll inch up a bit more, then dig into a rally, but don't expect anything spectacular. Get your selling ready for Dow 10,000 to get shut of any remaining stocks.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.



Monday, January 05, 2009

Gold and Silver Prices Should Rally Well Into the Spring, Taking Gold Above $1,200 and Silver Near the $28 Mark

Gold Price Close Today : $857.20
Change: -21.60 or -2.5%

Silver Price Close Today : $11.245
Change: 22 cents

Gold Silver Ratio: 76.39

Dow Industrials: 8,952.89
Change: -81.80 or -0.9%

US Dollar Index Today: 82.66
Change: 1.17 or 1.4%

Except for my office still being torn up and trying to learn to work on Apple instead of PC computers, I'm glad to be back. I hope y'all enjoyed your Christmas.

Silver and gold prices worked their way higher during the week between Christmas and New Year, but remember that during that time most traders are away, so that trading sometimes is just a blip on the screen, meaning nothing. Gold closed out last week at US$878.80, and silver at 1146.5 cents. I held my breath. What would happen when the bandits returned to the market?

Early on, the short sellers drove silver down to $10.90, and gold to the ropes of US$850. Did they break?

Not for a minute. They began clawing their way up again. The gold price closed at $857.20, down 21.00, and the silver price at 11.24, down 22 cents. If you merely glance at those closes, you might mistakenly conclude that silver and gold had a tough down day. In truth, the black shirts on the floor played with the market last week. Today those phantom gains were lopped off, but more importantly, both silver and gold held above critical support ($11.00 and $850). Both bottomed back in November, ran up to the top of the trading channel, then traded sideways through Christmas.

Following the typical seasonal pattern, gold and silver prices should rally well into the spring, taking gold above $1,200 and silver near the $28.00 mark.

STOCKS are very slowly trying to pull up into a rally. Although the S&P500 has reached a respectable 927.45, the Dow just can't climb over that fence at 9,000. Expect stocks to rally into the spring, too, but after 4 - 6 months to swoon again. Use this rally to sell off any stocks you may yet hold. If ever there was a "last chance", this is it for stock investors. (Yes, I exempt from that recommendation precious metals stocks.)

The US DOLLAR INDEX at 82.66 today showed a big one day jump -- 116 basis points -- but is only about 100 basis points above its December 23 close. We are not impressed. The dollar is struggling and wallowing like an old scow in high seas. Eventually it will sink.

Before we go to sleep, y'all look at the GOLD/SILVER RATIO. It is driving toward the bottom of the range, and should shortly break through 70. A very big rally in silver and gold prices lie in front of us. Notice that as metals' prices climb, premiums are slipping. I bought a few Austrian 100 coronas and Mexican 50 pesos today at rates that translate into 4.5% retail premiums, best we've seen in a long time. Platinum American Eagles are once again available, but at a starchy 5.5% premium at wholesale.

I appreciate y'all's enthusiastic reaction to my Christmas Clearance Sale. All the lots disappeared quickly. Thanks very much.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"
The-MoneyChanger.com

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.