Friday, September 03, 2010

Silver and Gold Prices are Breaking Out Into a Huge Rally

Gold Price Close Today : 1,249.20
Gold Price Close 27-Aug : 1,234.80
Change : 14.40 or 1.2%

Silver Price Close Today : 1991.5
Silver Price Close 27-Aug : 1903.9
Change : 87.60 or 4.6%

Platinum Price Close Today : 1,558.00
Platinum Price Close 27-Aug : 1,531.00
Change : 27.00 or 1.8%

Palladium Price Close Today : 532.00
Palladium Price Close 27-Aug : 504.00
Change : 28.00 or 5.6%

Gold Silver Ratio Today : 62.73
Gold Silver Ratio 27-Aug : 64.86
Change : -2.13 or -3.3%

Dow Industrial : 10,428.18
Dow Industrial 27-Aug : 10,108.04
Change : 320.14 or 3.2%

US Dollar Index : 82.530
US Dollar Index 27-Aug : 82.940
Change : -0.41 or -0.5%

Another coincidence! Biggest egg recall for salmonella contamination contamination in history. Well, whadda y' kno! Another coincidence! Jes' so happens that in the US Senate is S.510, the hilariously-misnamed Food Safety Modernization Act that will put small farmers out of business and so make the world safe for agribusiness corporations. Hot dog! Makes you proud to be an Amurrikun when you see that sort of efficiency in our gangster government.

Look at the week. Wow. Silver jumped 4.6%, stocks jumped 3.2-4%, and gold climbed only 1.2% . Wow. That looks .. . That looks . . . Bogus.

Before I fume about what they did to gold today, let's look at that scrofulous US dollar. The dollar dropped 35.2 basis points today to life support at 82. If the dollar falls through 82 it will completely cross out any chance of a rally. Now, that might be the bottom of the fall and the end of it. If so, 'twill rise next week, probably lively. Remains to be seen. Now trading 82.053.

STOCKS made a fool out of me this week, rising to 10,428.18 today. This looks like a bear market rally, fuelled by short covering, but that can run further still, maybe to 10,700. Today it hit the 200 DMA (10,451). That makes this no more than a customary bear market rally. Make like Ulysses and lash yourself to the mast, nor heed the siren's song. Stay away from stocks.

GOLD was there, yea! With these mine own eyes I saw it trading at $1,254 and higher. Silver was near 2000c. Gold had at the New York Open fell very sharply, from 1252 to 1238, traded sideways under 1240 until ll:00, then rose like a shot to 1250. About that time the Nice Government Men kicked in --- wait, wait, did I say that? No, no, I mean -- mystery sellers sold bucket loads of gold to keep it from crossing 1250, but it kept bumptin up against tha ceiling like a kid's helium balloon in your living room. Long and short of it is, the comex gold close at $1,249.20, down $2.30 from yesterday, is one of the most bogus examples of tape painting you'll ever see.

And how do I know? How can you be so certain, smart guy? Because I was watching silver all the time, too. How much sense does it make for silver to be trading at 1998c, highest level since 2008, and gold falls backward? In a pig's eye. 'Tain't possible. Silver was flat from yesterday about 1960c at the open, traded sideways two hours, then jumped straight clean up, "somebody" bashed it, and it closed come at 1991.5c, up 27.5c.

From another viewpoint, I am not sure why I am so adamant about this being a tape-painting episode. Silver and gold just don't have the mushy action that signals a top. No, they are strong, decisive, blasting ahead. Speaking of heads, I may get mine handed to me on a platter for saying this, but I think silver and gold will rise much higher next week. Why? Because that gold/silver ratio has fallen out of that long-standing even-sided triangle. Fallen out, did you hear? Broken out to the downside, and that will not happen if silver and gold are about to faint. Just the opposite, and that move is only beginning.

Tell the punchline, Moneychanger! Here 'tis: stocks will fall next week after a little more rise. Dollar is acting like a drunk walking across a bridge. Silver and gold are breaking out into a huge rally. Least it seems that way to me.

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.