Gold Price Close Today : 1152.80
Change: -8.80 or -0.8%
Silver Price Close Today : 18.238
Change -16.5 cents or -0.9%
Platinum Price Close Today: 1712.80
Change: -19.10 or -1.1%
Palladium Price Close Today: 525.25
Change: 6.75 or 1.3%
Gold Silver Ratio Today: 63.21
Change: 0.089 or 0.1%
Dow Industrial: 11,019.42
Change: 13.45 or 0.1%
US Dollar Index: 80.47
Change: -0.10 or -0.1%
Life always threatens us with such a blizzard of details that the horizon, the long term, is obscured. Worse, our fragile minds only hold a few trains of thought at a time, and we are easily drawn off the point. So it is with SILVER and GOLD PRICES. Reports of this or that news and threats of a decreasing fiat money supply and growling from Bernanke and other dollar shills draw us away -- as they are intended to do -- from the important long term conclusion, and the actions that requires.
What is that? That every fiat currency in history has been destroyed by inflation, and that the dollar will follow that course. Therefore, we can only protect ourselves by swapping dollars for alternative sound currencies, namely, silver and gold.
There's more for our particular time. The US and other governments manipulated the silver and gold markets downward to suppress prices. This created a flood of paper silver and gold, or, stated conversely, an colossal short position in silver and gold. That means that they have sold silver and gold that existeth not, so when the music ends and everybody dives for a chair, most of the chairs will have no gold and silver on them. This short-squeeze will drive silver and gold prices even higher than the inflation alone would have driven them.
Conclusion? Buy physical silver and gold and take possession, waiting for the long term rise and don't fret about short term ups and downs. Above all, buy no paper gold or silver schemes like the ETFs SLV and GLD, etc., etc.
For more meditation in this same vein, see James Turk's article, http://www.fgmr.com/another-short-squeeze-in-the-precious-metals.html. For those of you who have been asking me to comment on London bullion trader Andrew Maguire's allegations that JP Morgan is manipulating the silver and gold markets, this is it above.
The SILVER PRICE turned in a snappy performance. It broke to a new low for the move at $17.93 about 11:00, then stair-stepped smartly back to $18.20. On comex the silver price closed down 16.5c to $18.238. What meaneth this display? Lots and lots of hungry buyers hanging around $17.90 ready to lay their money down and take a position. That is strong support underneath the market. I would be a buyer amongst them because this should be a very short correction, over this week at longest. What's the check on my optimism? A close below $17.60 gainsays this forecast.
The GOLD PRICE behaved like silver today. Somebody hit the gold price with selling about 9:30 and drove it from its $1157 high down to $1145 by 11:15. Then the gold price turned around and walked back over $1,150 for the rest of the day. Comex closed (12:30 Central time) at $1,152.80, down $8.80. This correction -- more a pause to catch breath -- ought not break $1,140, maybe hit $1,135 on a spike, and ought to end by Thursday or Friday.
Market is offering silver and gold on sale. Buy it.
Yesterday and today the DOW has created a broadening top formation, the outline of a megaphone with mouth opening rightward. This is a frustrating formation that makes new lows, but then slightly higher highs, and leaves you always wondering whether that's what you are watching or not.
Today's Dow chart was honking strange. It fiddled around unchanged, then dropped deeply around 10:45, then make a slow climb to unchanged. After that came weak action oscillating around or slightly above unchanged, and then -- surprise, surprise! -- comes in the last 30 minutes a rise to 13.45 above yesterday's close for a close today at 11,019.42. That in itself is no great shakes, but the whole thing smells all over of rotten mackerel and Nice Government Men.
The US DOLLAR INDEX Opened at 80.695, made a high at 890.885, a low at 80.395, and is trading now at 80.467, down 9.5 basis points from yesterday. Most of todays trading was rangebound between 80.50 and 80.80. If the dollar breaks out on either side it will run in that direction. The Dollar index stands now below the 20 DMA (80.98) and a smidge under 50 DMA (80.53). That ought to confirm a downmove, but then, Forces are At Work in the dollar which rationality and normal market behaviour cannot forecast or foresee, namely, NGM.
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. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.