Friday, June 25, 2010

MUCH Higher Gold and Silver Prices are Coming - Buy, or be Left Behind

Gold Price Close Today : 1,255.80
Gold Price Close June 11: 1,257.20
Change: -1.40 or -0.1%

Silver Price Close Today : 19.11
Silver Price Close June 11 : 19.175
Change -6.50 cents or -0.3%

Platinum Price Close Today: 1,568.10
Platinum Price Close June 11: 1,590.05
Change: -21.95 or -1.4%

Palladium Price Close Today: 477.40
Palladium Price Close June 11: 489.75
Change: -12.35 or -2.5%

Gold Silver Ratio Today: 65.71
Gold Silver Ratio June 11: 65.56
Change: 0.15 or 0.2%

Dow Industrial: 10,143.81
Dow Industrial June 11: 10,450.64
Change: -306.83 or -2.9%

US Dollar Index: 85.299
US Dollar Index June 11: 85.578
Change: -0.28 or -0.3%

Tune down the SQUAWK and listen to the week broadcasting. Stocks were the big loser for the week, along with the US dollar and the Dow in gold Dollars. After all the flurry and turmoil, silver and gold prices closed the week basically unchanged.

The GOLD PRICE has been shining these lat two days. Yesterday it added $11.40, and today another $10.30 to close at $1,255.80, just under the all time high close at $1,257. But I feel like the girl whose boyfriend just asked her to get married. I want to say to gold, "That's good! That's great! That's wonderful -- but where's the ring?" The ring, of course, is that close above $1,257. Mayhap I wax too critical -- after all, gold had to contend with Options Expiry this week. We have an uptrend in force since November 2008, successful corrections without disastrous breakdowns, and now a summer rally. Face it: the gold price is determined to move higher.

After a thorough beating this week, the SILVER PRICE shook it all off and like a world class heavyweight champion came back to rout its opponents. It finished the week barely 6.5c below last week's close. Don't minimize the accomplishment: it's a long ways from 18.20 to 19.20. Today silver closed at 19.11, up 37.4c after rising 27.7c today. Most important was closing above 19.00, a psychological hurdle. The silver price is in the rally-mode again, and this sets it up for a challenge of the old 19.80 (intraday) high next week. Only resistance is around 19.50. Strikes me that this is time to add to both silver and gold positions. When silver breaks out above 19.80, then beats the 2008 high of 20.68, twill run like a scalded dog toward $30.00. Yep, I know it is summer and the time metals usually aestivate, but this year they are skipping that little nap. MUCH higher gold and silver prices are coming. Buy, or be left behind.

The US DOLLAR INDEX fell out of bed before the open, around 86.1, and kept on rolling down the stairs all day long. Trading now at 85.299, down 43.4 basis points, a hefty bleeder for the dollar. Dollar stands but 25 basis points from its 50 DMA at 85.04, & is already below its 20 DMA (86.68). This 85 level is a cliff where the foot of the cliff is 82.25. The dollar leaves us still undecided, whether that June peak was the end of the rally from last December, or merely one rest stop on the way to 90 or 92. If it fell to 83.2 that would amount to only a 38.2% correction of that Dec - June move. Fall below 82 & the dollar says, "The rally is over." Right now it acts as if it will fall further next week.

I really take no joy in reporting on stocks, because I know how very many people remain stuck and clueless in that trap. This week the Dow declined steadily, losing 307 points. Today it lost another 9 points to close at 10,143.81. S&P500 today closed at 1,076.76, up 3.07. The day for stocks opened badly, pounding the down as low as 10,081, mighty near the magic 10,000 line. Yet stocks found a friend or friends about 1:30 who waded in buying so the Dow wouldn't end the week on a 90 point down day. Wow. Isn't it neat that the Nice Government Men do that sort of really helpful work today? Once upon a time they only did lowly jobs like filling potholes and chopping weeds and arresting John Dillingers. Now they've stepped up and are "making the world safe for Billionaires."

The Dow in Gold Dollars didn't quite make a new low for this move, but it was close. Signal is given: gold will move big against stocks.

On this day in 1876 Lt. Col. George Armstrong Custer and his 200 men of the 7th cavalry lost their lives in Montana at the Battle of Little Big Horn. Custer and the US Army were practicing on the Sioux and Cheyenne the genocidal skills they had perfected against Southerners during the War for Southern Independence, but in 20 minutes the Indians turned the tables.

On this day in 1977 Roy C. Sullivan of Virginia was struck by lightning for the seventh (7th) time. Looks like he would have quit going outside after the 5th or sixth time, doesn't it? There's something weird about people getting struck by lightning. I know
a man who has been struck not once but twice by lightning. That's a powerful argument against randomness in the universe, mathemeticians notwithstanding. What are the chances that one person would be struck twice by lightning? Or 7 times?
And survive?

Y'all enjoy your weekend.

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

- Franklin Sanders, The Moneychanger

© 2010, 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.