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Friday, October 29, 2010

This Gold Price Should Reach $1,600 in January, February or March

Gold Price Close Today : 1,357.10
Gold Price Close 22-Oct : 1,324.40
Change : 32.70 or 2.5%

Silver Price Close Today : 2456
Silver Price Close 22-Oct : 2312.5
Change : 143.50 or 6.2%

Gold Silver Ratio Today : 55.26
Gold Silver Ratio 22-Oct : 57.27
Change : -2.01 or -3.5%

Silver Gold Ratio : 0.01810
Silver Gold Ratio 22-Oct : 0.01746
Change : 0.00064 or 3.6%

Dow in Gold Dollars : $ 169.12
Dow in Gold Dollars 22-Oct : $ 173.76
Change : $ (4.65) or -2.7%

Dow in Gold Ounces : 8.181
Dow in Gold Ounces 22-Oct : 8.406
Change : -0.22 or -2.7%

Dow in Silver Ounces : 452.05
Dow in Silver Ounces 22-Oct : 481.41
Change : -29.36 or -6.1%

Dow Industrial : 11,102.40
Dow Industrial 22-Oct : 11,132.56
Change : -30.16 or -0.3%

S&P 500 : 1,182.66
S&P 500 22-Oct : 1,183.08
Change : -0.42 or 0.0%

US Dollar Index : 77.120
US Dollar Index 22-Oct : 77.486
Change : -0.37 or -0.5%

Platinum Price Close Today : 1,707.80
Platinum Price Close 22-Oct : 1,674.00
Change : 33.80 or 2.0%

Palladium Price Close Today : 646.90
Palladium Price Close 22-Oct : 590.50
Change : 56.40 or 9.6%


Y'all just gaze upon the table above, remembering that the week's end is the score board, and the only thing that counts is what score you put on the board.

Who scored? Big winner for the week is palladium gaining 9.6%. Silver placed second with an amazing 143.5c or 6.2% rise. The dollar and stocks all lost ground, and the gold/silver ratio took a whopping 2 point drop.

Today poor economic news for the US sent all the wise-guys back to short more dollars. Buck fell 18.8 basis points or 0.24%. However, look at the Euro. It peaked two weeks ago at 141.51 and today is at 139.16. I would not be short-selling dollars now, because when "everybody knows" a market is going down, they've all already sold it, so whence cometh the new sellers come from to drive the price lower? The Dollar Index may fall all the way to its last low at 76.14, or even to the December 2009 low at 74.23, but remember that all those shortsellers make a sudden, sharp countertrend rally a virtual certainty. Only question is, when. However, the dollar has come close to nixing any potential for a big rally soon. If the dollar breaks 76.70, it will fall; if it breaks through 78.25, it will rally.

The Dow chart today on www.nasdaq.com looks like rags hung out to dry over a fence. Clearly the market's desire was to lay down, since most activity took place below the unchanged line, with only a few little ragged blips above. At day's end the Dow closed down 11.55 at 11,102.40, not sounding as sick as it really was. S&P500 closed at 1,182.66, down 1.12. By the way, even if I thought stocks were about to rally intensely, I still wouldn't buy them. They are imprisoned in a primary down trend, and will remain in that grip for another 5 years. Never invest against the primary trend.

My biggest failing is not following my own advice. That silver today pierced 2402c and did precisely what I said it would, it shot straight up, from 2420c to 2456c at Comex close (up 68.9c) to 2474c in the aftermarket. Weekly chart is also strong as a garlic milkshake. Assuming that silver early next week exceeds the last intraday high at 2490c and so avoids making a double top, the flight skyward hath resumed.

I reckon that all those folks who rushed to sell dollars today at the same time rushed to buy gold. It broke through 1345 resistance before New York opened, shot up, wavered and retreated to 1342.50 about 9:45, meandered and then about 12:30 shot higher, but couldn't breach $1,360. A close through $1,387.10 would confirm that the correction has ended. On Comex gold today closed up $15 at $1,357.10.

Only fly in this ointment is the possibility that I have misinterpreted events and that today was not the beginning of another wave up but rather the top of a B-leg in an ABC correction, because they always look very strong. A silver close above 2490 on Monday would pick that fly out of the ointment. A sharp drop on Monday would confirm that fly really was present.

Looking farther out, I am still expecting a January, February, or March top to this rise. That should reach $1,600 gold and 3400 - 3900c silver.

On this day in 1929, Black Tuesday, a stock market crash ushered in the Great Depression. The Agricultural Depression had already been running for 8 years.

On this day in 1945 the first ball point pens went on sale in New York City for US$12.50 each, the equivalent of $152.31 today.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Thursday, October 28, 2010

Stop waiting - Time to buy Gold and Silver, Assuming Silver and Gold Prices Follow Through Tomorrow

Gold Price Close Today : 1342.10
Change : 19.90 or 1.5%

Silver Price Close Today : 23.871
Change : 0.471 cents or 2.0%

Gold Silver Ratio Today : 56.22
Change : -0.281 or -0.5%

Silver Gold Ratio Today : 0.01779
Change : 0.000089 or 0.5%

Platinum Price Close Today : 1692.70
Change : 17.00 or 1.0%

Palladium Price Close Today : 629.25
Change : 12.10 or 2.0%

S&P 500 : 1,183.78
Change : 1.33 or 0.1%

Dow In GOLD$ : $171.18
Change : $ (2.75) or -1.6%

Dow in GOLD oz : 8.281
Change : -0.133 or -1.6%

Dow in SILVER oz : 462.79
Change : -3.40 or -0.7%

Dow Industrial : 11,113.95
Change : -12.33 or -0.1%

US Dollar Index : 77.29

Change : -0.861 or -1.1%


I couldn't get SILVER or GOLD right today, either. Saw them rising, waited till they convinced me they really had turned around, and managed to buy near the day's high. Good work, Moneychanger.

Five day GOLD PRICE chart appears to have formed most of an upside-down head and shoulders, with the left shouder bottoming Tuesday at $1,328, the head troughing yesterday just under $1,320, and a rise today back to the neckline about $1,345. If that's an accurate reading, tomorrow gold will dip to form the right shoulder, bottoming about $1,330, maybe $1,335. Next week or tomorrow it will climb back up to the neckline. Then 'twill break through and leave everybody in the dust like when the bell rings at the Kentucky Derby.

The GOLD PRICE rose 19.90 to close Comex at $1,342.10. It will take a close below $1,320 to turn gold down.

The SILVER PRICE 5-day chart does not mirror gold's. Rather, silver has established an uptrend and day by day keeps validating that uptrend line. However, resistance at 2400c stopped silver today. Comex settled silver at at 2387.1c, up 47.1c. Silver's Tuesday peak at 2420c presents the next hurdle. I think we have seen the bototm of the move. Y'all will know I'm dead-wrong if silver closes below 2320c, because that event would turn the trend down.

Stop waiting. Time to buy, assuming the SILVER PRICE and the GOLD PRICE follow through tomorrow.

These are markets that will slice your throat and grin at you while waiting for your head to topple off your shoulders. Be careful.

After yesterday's bold start the dollar index fell 86.1 basis points to 77.288 right now, a loss of 1.11%. Goodness, I understand that the rally from Monday was complete and a correction must follow, but the dollar gave up most of its gains. That is a full 62% of the foregoing gain.

Anyhow, let's ponder this mess. The dollar has established support around 72.20, so as long as it can cling to life above that point, it can continue to "rally". A close below that point makes the dollar doubtful, a close below 76.70 makes the dollar doomed. Expect it to continue its teasing rally.

I don't care how many times the Nice Government Men goose the stock market, they can't hide a trend and they cannot succeed against a primary downtrend. The Dow peaked Monday on the 5-day chart around 11,250, and since then has made a series of lower lows and lower highs, which, definitionally and mathematically, constitutes a "downtrend." Have y'all observed how every day the Dow erodes a bit more? Tomorrow don't expect it to beat 11,150, but a bottom number is wide open. Today the Dow closed at 11,113.95, down 12.33, up off the day's low by 62 points but still lower for the day. Did I mention that most of that gain came near closing time? How forgetful I am. S&P500 closed up 1.33 at 1,183.78.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Wednesday, October 27, 2010

Unlike the Gold Price, the Silver Price Has Traced out a Clear Uptrend off Last Friday's Low

Gold Price Close Today : 1322.20
Change : (15.80) or -1.2%

Silver Price Close Today : 23.398
Change : (0.426) cents or -1.8%

Gold Silver Ratio Today : 56.51
Change : 0.347 or 0.6%

Silver Gold Ratio Today : 0.01770
Change : -0.000109 or -0.6%

Platinum Price Close Today : 1675.60
Change : -24.40 or -1.4%

Palladium Price Close Today : 617.15
Change : -11.90 or -1.9%

S&P 500 : 1,182.42
Change : -3.19 or -0.3%

Dow In GOLD$ : $173.95
Change : $ 1.41 or 0.8%

Dow in GOLD oz : 8.415
Change : 0.068 or 0.8%

Dow in SILVER oz : 471.45
Change : -5.83 or -1.2%

Dow Industrial : 11,126.28
Change : -43.18 or -0.4%

US Dollar Index : 78.12
Change : 0.410 or 0.5%

My suspicions yesterday bore fruit today in a large gold plunge, back to the $1,320 support.

Overnight, in Asia, the GOLD PRICE hit air and fell from $1,340 with two gaps. That fall never stopped until 11:00 at $1,319.50. It rose to $1,324, then touched off $1,320 once more (double bottom?) then climbed to oscillate around $1,325. If gold ever intends to hit $1,300, or even the $1,292.50 fifty day moving average, tomorrow would be a likely time. Arguing against that is the intraday low last week at $1,315.50, which makes today's action so far a double bottom. Looks more likely to me to fall a bit further. Likewise, if gold has in mind falling much further, that aim ought to be made clear tomorrow by breaking through the 50 DMA.

Like the GOLD PRICE  the SILVER PRICE posted a gap down (only one) in Asian trading. Unlike gold, silver has traced out a clear uptrend off last Friday's low at 2280c, with rising lows at 2320c yesterday and 2355c today. That trend is accompanied by rising highs, too: 2380c on Monday and 2420c yesterday. Therefore a break below today's 2355c low would drag silver lower. The 20 day moving average, which stopped silver last Thursday at 2285, now stands at 2315c. Today's chart shows double bottoms at 11:00 and 1:30, and I have to admit that might be the point where it turned around. However, silver will have to prove that tomorrow. I think that 2250c is a number we must still keep an eye on. A close tomorrow above 2420c points to higher prices.

The US DOLLAR INDEX made good its threatened rise today, shoving 77.80 aside and touching 78.27. Now it is trading at 78.118 up 41 basis points. Clearly the dollar is rallying, most likely toward 80. That strews tacks on the road ahead of silver and gold, never mind stocks.

Saggy old Dow looks like a big bowl today, sinking down to 11,023, the rising enough to close at 11,126.28, down 43.18. S&P500 fell 3.19 to 1,182.42. They will keep stretching until finally they break. Stay away from stocks.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Tuesday, October 26, 2010

While the Dollar Rose Lustily Today, the Gold Price Was Not Disturbed, and Silver Positively Rioted

Gold Price Close Today : 1338.00
Change : (0.30) or 0.0%

Silver Price Close Today : 23.824
Change : 0.280 cents or 1.2%

Gold Silver Ratio Today : 56.16
Change : -0.681 or -1.2%

Silver Gold Ratio Today : 0.01781
Change : 0.000213 or 1.2%

Platinum Price Close Today : 1700.00
Change : 0.00 or 0.0%

Palladium Price Close Today : 629.05
Change : 19.80 or 3.2%

S&P 500 : 1,185.64
Change : 0.02 or 0.0%

Dow In GOLD$ : $172.57
Change : $ 0.14 or 0.1%

Dow in GOLD oz : 8.348
Change : 0.007 or 0.1%

Dow in SILVER oz : 472.38
Change : 3.72 or 0.8%

Dow Industrial : 11,169.40
Change : 5.41 or 0.0%

US Dollar Index : 77.71
Change : 0.605 or 0.8%

The SILVER PRICE and the GOLD PRICE have me bracing for another leg down, but I am always a little late to catch on and a little leery after a peak. The 5-day chart looks healthy enough and might have completed its decline, but the six month chart is calling for another leg down. gold is standing on its 20 DMA at $1,341.43, but well above its 50 DMA at $1,290.48. Today gold made a slightly lower low than yesterday's, falling to $1,328 about 9:30 then climbing briskly to $1,342 and backing off to trade sideways the rest of the day. Comex closed a bewildering $1,338.00, down a piddling 30 cents.

SILVER also made a lower low today at 2317c, but popped up off that low like a basketball held under water. When Comex closed silver had risen 28c to 2382.4c, and it rose further in the aftermarket, to 2420c.

On its six month chart silver is squatting above its 20 DMA (2323c), and hints at one more down leg, perhaps something fit to terrorize everyone for a day.

Merciful heavens! I'm tired of breaking my head with this, because six months from now 'twill appear a small and risible worry. Why? Because silver and gold are in a primary uptrend, and whatever little jiggles they make today, in six months they will most likely be higher.

The DOW and S&P500 today looked plumb silly. Nice Government Men, you ought to be ashamed of yourselves! Y'all can make a better show than that! The Dow spent the entire day down, as low as 11,087, then in the last few minutes of trading rose to -- get this -- plus 5.41 at 11,169.40. S&P500 was even sillier, rising an infinitesimal 0.02 to 1,185.64. Stocks will break soon, and when they do you do not want to be riding them.

The US DOLLAR INDEX decided to make good on its threat and rise after all. It climbed today 60.5 basis points (0.78%) crashing through 77.40 resistance and 77.65 resistance. That looks like a confirmed double bottom at 76.85 (Thursday) and 76.70 (Monday), with a rise up off the bottom to a new high. Dollar also cleared its 20 DMA at 77.56 and is ready to chase the 50 DMA, now at 80.14.

But carefully observe that while the dollar rose lustily today, the GOLD PRICE was not disturbed, and SILVER positively rioted.

Also I say this because over the years I have watched investors make mistakes. Two of the biggest mistakes arise from not understanding what a bull market (primary trend) does: it makes prices rise generally, and often unexpectedly, and always against opposition that tells you the bull market is about to end. So investors make two mistakes: they delay buying, waiting for the bottom of a correction. When the correction comes, their greed seduces them to wait just a little longer and sure enough, the market runs away from them before they can ever make up their minds to buy. The other mistake is worse, to try to sell the highs and buy back the lows. Nobody can successfully do that more than a couple of times a decade, and worse, that strategy negates the benefit of a bull market. Worst of all, sooner or later you will sell a peak that turns out NOT to be a peak, you lose your position, and the market runs away from you.

Then what is the wisest strategy for a bull market? Get right, and stay right; get long, and stay long; get long, and get longer. Buy and hold for the ultimate peak, not for the chiselling in-betweens.

Oh, yes, there's one more secret: sell at the peak. Don't fall in love with your bull market investment, because everything has its time and season, and its end. And NEVER confuse a bull market with investing genius.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, October 25, 2010

With Gold Prices Like These, The Market is Handing You a Gift Labelled "Last Chance"

Gold Price Close Today : 1338.30
Change : 13.90 or 1.0%

Silver Price Close Today : 23.544
Change : 0.419 cents or 1.8%

Gold Silver Ratio Today : 56.84
Change : -0.429 or -0.7%

Silver Gold Ratio Today : 0.01759
Change : 0.000132 or 0.8%

Platinum Price Close Today : 1700.00
Change : 26.00 or 1.6%

Palladium Price Close Today : 609.25
Change : 18.75 or 3.2%

S&P 500 : 1,185.62
Change : 2.54 or 0.2%

Dow In GOLD$ : $172.44
Change : $ (1.30) or -0.7%

Dow in GOLD oz : 8.342
Change : -0.063 or -0.7%

Dow in SILVER oz : 472.15
Change : -0.77 or -0.2%

Dow Industrial : 11,164.05
Change : 31.49 or 0.3%

US Dollar Index : 77.13
Change : -0.282 or -0.4%


I hardly want to talk about the SILVER PRICE and the GOLD PRICE today because I can't get clear in my own mind what they intend to do. It appears to have risen off the Friday bottom in rallying mode, and to have made a peak and A-B-C correction today. Question is, has gold finished the correction that began at $1,386, or will it make one more downmove before it resumes rallying. I've watched this enough before to know that surprises await the unwary, and sometimes even the ultra-wary. Key support is 1,335, so watch that. If gold can't defend that, it will make another leg down. Up above $1,349 is the hurdle gold must breach. If it climbs over that, it will attract buyers and move higher.

Today on the Comex the GOLD PRICE closed at $1,338.30 by adding $13.90 to Friday's close. Silver added 41.9c to reach 2354.9 when Comex shuttered its doors.

With its 2280c low Friday, silver's 5-day chart looks much like gold's. The SILVER PRICE has traced out new support at 2340c, so tomorrow must hold that level or sink. Above silver has been stopped by 2380c, then 2400c. Another down day tomorrow wouldn't surprise me, now would another strong up day. Until silver breaches 2400c, the picture isn't clear.

Does it really matter? At these prices or at lower the market is handing you a gift labelled "Last Chance".

The US DOLLAR INDEX must have enjoyed a wild weekend because it was hung over today. The dollar broke 76.85, which could signal that it will drop further. It touched 76.70 today, enough to break 76.85, but maybe not enough to change the trend, that is, to break down. Dollar actually spent the whole day climbing in the US market, and ended the day down only 28,.2 basis points at 77.131. That 77 line is beginning to feel important -- not bad performance that the Dollar closed higher than that 77. For now, the dollar is wallowing in a deep swamp and odds slightly favour it sinking.

The DOW JONES INDUSTRIAL AVERAGE tried to clear 11,200 today but failed wretchedly at day's end. Sure, it rose 31.49 to 11,164.05 (S&P500 clumb 2.54 to 1,185.62), but that doesn't shine any shoes when you learn that the high was 11,247.60.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Friday, October 22, 2010

Gold Price to Reach $1,600 at the End of This Move

Gold Price Close Today : 1,324.40

Gold Price Close 15-Oct : 1,371.10
Change : -46.70 or -3.4%

Silver Price Close Today : 2312.5

Silver Price Close 15-Oct : 2427.2
Change : -114.70 or -4.7%

Gold Silver Ratio Today : 57.27

Gold Silver Ratio 15-Oct : 56.49
Change : 0.78 or 1.4%

Silver Gold Ratio : 0.01746
Silver Gold Ratio 15-Oct : 0.01770
Change : -0.00024 or -1.4%

Dow in Gold Dollars : $ 173.76
Dow in Gold Dollars 15-Oct : $ 166.79
Change : $ 6.97 or 4.2%

Dow in Gold Ounces : 8.406
Dow in Gold Ounces 15-Oct : 8.068
Change : 0.34 or 4.2%

Dow in Silver Ounces : 481.41
Dow in Silver Ounces 15-Oct : 455.78
Change : 25.63 or 5.6%

Dow Industrial : 11,132.56
Dow Industrial 15-Oct : 11,062.63
Change : 69.93 or 0.6%

S&P 500 : 1,183.08
S&P 500 15-Oct : 1,176.20
Change : 6.88 or 0.6%

US Dollar Index : 77.486
US Dollar Index 15-Oct : 77.019
Change : 0.47 or 0.6%

Platinum Price Close Today : 1,674.00

Platinum Price Close 15-Oct : 1,699.00
Change : -25.00 or -1.5%

Palladium Price Close Today : 590.50

Palladium Price Close 15-Oct : 592.00
Change : -1.50 or -0.3%


GOLD and SILVER closed puny on Comex. Silver rose a colossal 2/10 of a cent to 2312.5c, and gold dropped 30c to $1,324.40.

The Silver Price lost 114.7c this week. Today it made a new low overnight at 2280c, but the 5 day chart looks like it may have completed its correction. Only thing that keeps me from becoming dogmatic in that opinion is that this week ended so quietly -- full of fury during the week, and did nothing today as if the week had just tired everybody out.

To put this correction in perspective, a 20% correction of the July-October move is 2302c. That's been satisfied. 2250c would correct the February - October move. More, silver's 20 DMA stands at 2292, and that might catch it. Because I view this as a minor correction in a larger, ongoing trend, last week's top wasn't a major top and therefore doesn't deserve a major correction. You'll know that outlook is wrong if silver closes below 2090c and gold below $1,265.

My friend Catherine Austin Fitts made me meditate on these words:

"Enemies of self-determination and peace send us the message that we have no power. Why do we listen to them and ignore the interests of those whom we love?" Insightful question.

The week never lies. It's the scoreboard at the end of the game. And this week ended with a whimper, not a shout, after huge moves by the dollar, gold, and silver -- but not stocks.

For the nonce we must assume that the US dollar has turned around at last and begun to rally, but the dollar still needs to confirm that intention by higher prices next week. On Monday the Dollar made a new low for the move at 76.85, then rallied on Tuesday by 131 basis points. Next day it followed through with -- a 99 basis point drop! Some consistency. However, this decline drew out a double bottom with another low Thursday at 76.85. Today it stalled at 77.60 resistance, and now is trading at 77.486, up 6.8 basis points. This has also traced out an upside-down head and shoulders, not much but it targets 78.20 in the very short term. Further out the dollar should reach 80 or 82. However, you will know it has failed and turned its back on a rally if it closes below 76.85. That break would drag the dollar down to 74.25.

STOCKS, which without question were benefiting from the Fed's announced Quantitative Easing 2 inflation campaign as much as silver and gold, have shown themselves remarkably indifferent to a rising dollar. Tuesday the Dow dropped 165.07, but then returned to the April/May resistance at 11,150-11,200. Today showed bewilderment: the Dow dropped 14.01 to 11,132.56 while the S&P500 gained 2.82 to 1,183.08. Other indices rose. That up and down mixed close doesn't bespeak strength or confidence. Stay out of stocks, they are locked into a bear market that will extend another five years.

The RSI is also encouraging for Silver, having descended from its massively overbought heights. The MACD, however, is hinting at further declines.

The Gold Price made a new all time high close at $1,376.7 last Thursday, then hit 1371.20 on Monday for a double top. Tuesday gold fell 36.10 or 2.64% -- a meaty move. So far $1,315-$1,320 has held, and that may complete the correction. But don't be surprised if it stumbles clean to $1,293 sharply, then rebounds. Or support at the $1,300 round number might hold.

Raise your eyes a moment through this dusty confusion to the bull market horizon. All this plunging and correcting merely shakes out the weak holders, cleansing the market to prepare for the next advance. I am still looking for gold to reach $1,600 and silver to reach 3400c (if not 3900c) at the end of this move. That should occur in January, February, or March.

And that will NOT mark the end of the bull market. It has another 5 years to run.

On this day in 1836 Sam Houston was inaugurated at the first elected president of the Republic of Texas. Like many great men, Houston was a congeries of courage, vision, and bull-headedness, with a substantial admixture of ethanol.

On this day in 1907 began the Panic of 1907 when depositors began withdrawing their money from New York banks. The banksters leveraged this disaster into a congressional study group sent by congress to investigate the "scientific" central banking systems of Europe. If you suspect they had a conclusion in mind before hand, you would have judged accurately. It was the Federal Reserve.

On this day in 1934 another gangster, Charles "Pretty Boy" Floyd, a notorious robber of banks, was shot and killed by federal agents in East Liverpool, Ohio.

Now how do you tell a bankster from a gangster? Well, "some rob you with a six gun, and some with a fountain pen." Besides that, instead of using a six gun or Tommy gun to rob you, the banksters use congress.

I would appreciate y'all's prayers for my wife, Susan. Remember she had heart surgery about two years ago, a mitral valve repair, and she is suffering from an irregular heartbeat again. This comes on top of her foot surgery four weeks ago. Bad as all that sounds, my toughest assignment is to slow her down.

Y'all enjoy your weekend. Argentums et aurum comparanda sunt --

-- Silver and gold 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 bubble has burst, primary trend down.


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

- Franklin Sanders, The Moneychanger

The-MoneyChanger.com

© 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.



Thursday, October 21, 2010

Gold Price Calls for Shallow Correction then Rise to $1,600 Early Next Year

Gold Price Close Today : 1324.70
Change : (18.60) or -1.4%

Silver Price Close Today : 23.123
Change : (0.725) cents or -3.0%

Gold Silver Ratio Today : 57.29
Change : 0.962 or 1.7%

Silver Gold Ratio Today : 0.01746
Change : -0.000298 or -1.7%

Platinum Price Close Today : 1675.00
Change : -7.80 or -0.5%

Palladium Price Close Today : 588.00
Change : 1.70 or 0.3%

S&P 500 : 1,180.26
Change : 2.09 or 0.2%

Dow In GOLD$ : $173.94
Change : $ 3.02 or 1.8%

Dow in GOLD oz : 8.414
Change : 0.146 or 1.8%

Dow in SILVER oz : 481.29
Change : 1.05 or 0.2%

Dow Industrial : 11,146.57
Change : 38.60 or 0.3%

US Dollar Index : 77.47
Change : 0.299 or 0.4%


The GOLD PRICE bounced a little yesterday, but today was whipped in the same pattern as the SILVER PRICE. It dropped from the open until 9:00, tried to recover and rose to $1,347.88, then played waterfall the rest of the day. Comex closed at $1,324.70, down $18.60. Aftermarket has risen a little.

After yesterday's dead cat bounce, the SILVER PRICE plunged again today. Silver opened only seven cents off yesterday's close, dropped to 2365c, then rose for a shot at 2400c. There it failed about 10:00 a.m., and that let loose the waterfall. By Comex close (12:30 Eastern), silver had fallen to 2312.3c, shedding 72.5c. Later it drifted to 2300c, but has scrabbled back to 2316c.

A drop to 2300 represents a 20% correction of the July - October run just finished. That might be plenty; might stop there. A 38.2% correction would reach 2175c. However, lateral support on the chart shows at 2295c and 2230c. The 20 day moving average, a possible target for a turnaround, stands at 2292, the 50 day at 2085c. The 50 DMA chimes and rhymes with a 50% correction at 2092.

Still, I believe this will be a shallow correction, and while it yet may see 2230, I don't believe it will drop further.

Targets, targets. The GOLD PRICE at $1,333 reached a 20% correction of the July-October rise ($218.70, by the way). The chart shows support at $1,320 (we left the 20 DMA behind at $1,336.12) and $1,300 and $1,260. $1,310 is also a candidate. Correction of 38.2% reaches $1,293.

We can only watch day by day. I re-iterate, this ought to be a shallow correction. A break below $1,290 would disabuse me of that notion. Don't get caught waiting for the perfect place to buy. SILVER and GOLD are already on sale.

Once again I remind y'all that my outlook calls for a shallow correction and afterwards a rise continuing to $1,600 early next year -- and 3400c silver.

Since I began talking to the late Charles Walters of Acres USA about it years ago, I have been trying to find the mechanism behind the axiom that "government money always de-capitalizes the taker."

Beyond all doubt I know that is true, but I have been struggling to understand how it works. Maybe it's this:

Those who accept government money are refusing to grow up and make their business work as a free-standing, profitable undertaking. They appear to make a profit, but when you subtract the government money, they have a loss. Therefore they never learn how to make their business work.

Over time government-money-takers become weaker and weaker, less and less able to stir themselves up to the exertion, the accurate thinking, and the diligent labour needed to serve their neighbours and make a profit. Their own capital is being consumed, but the government money stealthily hides the loss. Eventually their capital is all eaten away, and the government-money-taker goes bankrupt, wondering what happened to him. He didn't become unprofitable the year he went bankrupt. He was unprofitable all along, but the government money hid that and sapped his will to learn and his will to fight until it was too late to cure.

Today the SILVER and GOLD PRICE crashed through their previous lows, so we have to scratch our heads and guess how low this correction might carry. More below.

The US DOLLAR INDEX gained 131 basis points today, lost 99 yesterday, and gained back 29.9 today. Right now it's trading at 77.47. The five day chart says that as pitifully scrawny as yesterday looked, the dollar has only made a correction and in the process touched back to Monday's 76.85 low for a final kiss good-bye. More plainly, it looks like a double bottom at 76.85. Dollar still faces resistance at 77.60, but should easily clear that tomorrow.

Here are the limits: Dollar must not drop below 76.85 and upside needs to o'erleap 78.40 to confirm an uptrend. Odds favour a dollar rally now. It should reach 80, and could reach 82. After all the camp-followers fled into SILVER and GOLD and stocks from the dollar, this will slow silver and gold down.

Now The Moneychanger is sitting here chewing his lip and trying to figure out why stocks are resisting the dollar's push better than silver and gold. Had I only a small imagination I would reply, "Nice Government Men keeping stocks up and pushing metals down," and that might be true, but I have a greater imagination than that.

Remember, yea, recall carefully, that in April and May the Dow stalled at 11,150 -11,200, with a one day high of 11,520 (6 May) that sent it scooting downhill. My operating interpretation says that stocks have formed a big head and shoulders (left shoulder peaked Jan. 2010, head in May, right shoulder forming now) that targets a break to 8,000. So why should stocks be holding up better than SILVER and GOLD against a dollar rally? Well, stocks form a much larger market than metals and they turn more slowly, but that doesn't quite answer. Whatever the correct and recondite answer, I know that before long the fundamentals -- a bear market -- and the technicals will catch up with stocks.

Today the Dow gained 38.6 to close at 11,146.57, last spring's resistance level. The S&P500 closed 1,180.26, up 2.09.

If he had lived, today would have been my father's 100th birthday. He was born at Michie, Tennessee, about 7 miles from the Shiloh battleground. As a boy he spent Saturdays wandering through the woods picking up buttons, canteens, bayonets, belt buckles, Minie balls, and who knows what else. He hung around re-doing the 10 grade until the school added the last two grades. Never had played football until he went to college at West Tennesee Normal in Memphis, but was such an athlete that he lettered in football, basketball, baseball, and track. Tried to make it through medical school but his sponsor died halfway and he found he couldn't work full time and study. Became a high school teacher and football coach, then a principal and superintendent until he retired. He had the greenest thumb I have ever seen. His garden looked like he had opened the back door and thrown handfuls of seed out the door at random. No order at all, but all of it thriving. I thank God for my father's life.

On this day in 1929 was born Ursula LeGuin, a joy to all you science fiction fans.

On this day in 1805 at the Battle of Trafalgar the British Admiral Horatio Nelson defeated the French and Spanish fleet, but was killed in the fight.


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

- Franklin Sanders, The Moneychanger

The-MoneyChanger.com

© 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.



Tuesday, October 19, 2010

Worst Part of the Fall Usually Happens Right off the bat, So Give Metals a Few Days to See Where they Will Settle

Gold Price Close Today : 1335.10
Change : (36.10) or -2.6%

Silver Price Close Today : 23.674
Change : (0.633) cents or -2.6%

Gold Silver Ratio Today : 56.40
Change : -0.017 or 0.0%

Silver Gold Ratio Today : 0.01773
Change : 0.000005 or 0.0%

Platinum Price Close Today : 1663.80
Change : -32.70 or -1.9%

Palladium Price Close Today : 569.65
Change : -19.60 or -3.3%

S&P 500 : 1,165.90
Change : -18.81 or -1.6%

Dow In GOLD$ : $1,699.90
Change : $ 42.44 or 2.6%

Dow in GOLD oz : 82.232
Change : 2.053 or 2.6%

Dow in SILVER oz : 4,697.84
Change : 54.59 or 1.2%

Dow Industrial : 109,788.52
Change : -165.07 or -0.2%

US Dollar Index : 78.25
Change : 1.311 or 1.7%

When I take a fall, it's a big one. I knew a correction loomed, but missed it last night. Today the dollar finally rallied and whomped other markets soundly. At least the surprise happened as I warned, biting like a rattlesnake prematurely pronounced dead. Turns out I got bitten myself.

The US DOLLAR INDEX rose 131.1 basis points today (1.69%) and is now trading at 78.245. That is above the 20 day moving average (78.10) and proffers first confirmation of a rally.

Minimum target for this rally is 80, the last low. That rhymes with the 50 DMA at 80.66. Maximum target is 82.25, just above the 200 DMA at 81.85.

If the Dollar index recoups only 38.2% of its previous fall, it will stop at 78.92. If 50% of previous fall, then 80.64, rhyming again with the 50 DMA.

The euro closed at 137.29c, down 2.15c or 1.54%.

Yesterday, coincidentally or not (you decide), Little Timmy Geithner who is playing at being US Treasury Secretaty, announced the US would not engage in currency devaluation as a strategy to make its exports more competitive against other countries'. "Not a viable, feasible strategy," quoth Little Timmy, waving his wooden crutch. No, wait, strike that last phrase. That's Tiny Tim who does that. Anyhow, in Tennessee I was glad at least to discover that Little Timmy had at least learned that competitive devaluation is a strategy not (a) capable of living or workable, and not (b) capable of being accomplished. (I am translating because I see those two words viable and feasible together so much I had begun wondering whether they really mean anything.) Little Timmy's discovery raises my hopes that perhaps somebody else in Washington across the Styx might learn something else, like, none of the Keynesian nostrums they are now trying are "viable" or "feasible" either.

On this the 23rd anniversary of the 1987 stock market crash, STOCKS proved they haven't changed much by dropping 1.48%, 165.07 Dow points to 10,978.52 and 18.81 on the S&P500 to 1,165.90. A dollar rally will hurt stocks much worse than silver and gold over time.

The SILVER PRICE plunged through 2420c shortly before the New York open, then kept falling until 9:00 a.m. when it found feet at 2345c. It rallied to 2400c by noon, but couldn't hold on. By the time Comex closed at 1:30 Eastern silver had shed 63.3c to close at 2376.4c, down 2.6%. Aftermarket trading has carried it to 2337c, a mite panicky, I'd say.

Violating 2370c and 2350c implies silver will descend further still. The decline-confirming 20 DMA lies 60c lower. Let us ponder targets:

If this is a shallow correction (which might last 4 -6 weeks, a 38.2% correction would carry to 2200c; a 50% to 2100, and a 61.8% correction to 20.18.

If this is a more serious correction, the commensurate levels would be 38.2% at 2094c, 50% at 1975c, and 38.2% at 1854c. Those lower figures seem very unlikely to me, even as volatile as silver is.

When the GOLD PRICE shortly after opening at $1,366 dropped through $1,353, it fell clean to $1,332 in 30 minutes. From there it rallied to $1,345 by noon, then rolled downhill below $1,330. Comex closed down a colossal $36.10 (colossal for gold) at $1,335.10, down 2.64%, more than stocks.

The gold price cascaded to its uptrend line and its 20 DMA ($1,331.78). If it slides through that line for a shallow correction, it might stop at $1,325, or $1,300, even $1,297. A 50% shallow correction arrives at $1,270. 50 Day moving average chimes in there at $1,278.05.

A deeper correction could take the gold price to $1,255.

Worst part of the fall usually happens right off the bat, so give metals a few days to see where they will settle.

Before all the croakers come out of their rocks to announce the end of the silver and gold bull market, y'all need to remember that markets zig, and markets zag. Most commentators seem to wake up every morning like a goose in a new world, forgetting that volatility is a fact of life, unless you live under a Soviet system. There prices never change, but there's nothing to buy, either.

Y'all keep your eyes on the horizon. Seasonally silver and gold prices often put in lows in October or November, so this dip shouldn't last longer than Thanksgiving. Go home, kiss your wife or husband, enjoy your supper and your children, and know that the world is not about to fall off the rails yet. Then sleep soundly.

On this day in 1987 the Dow Jones Industrial average plunged 508 points or 22.6%. It was the second worst percentage drop in history until that time. Gold rose $15.50 to $486.50/oz.

Alan "The Wizard" Greenspan had only shortly before taken office as Fed Chairman. Gold rose swiftly above $500, and I will never forget seeing it manipulated downward the day they broke it. They did it by shorting platinum futures in the aftermarket, trusting that to suck down gold. It did. They manipulated stocks up by a similar tactic, buying S&P future to force arbitrageurs to buy up the underlying stocks. As I remember, Robert Ruben was chief hatchetman.

The manipulation was gigantic, but what became so instrumental in my personal education was the bragging they did later. I used to keep, but have since misplaced, clippings from the several part Wall Street Journal December report on the manipulation. It was an astounding admission and recounting of government intervention. They had not even sufficient couth to be ashamed. Not long after that plunge the Reagan administration formed the President's Working Group on Financial Markets, a.k.a. the "Plunge Protection Team," to intervene on a more permanent and less ad hoc basis. That is all accepted and justified as normal now.

Doesn't matter how many centuries pass, it will never be normal for governments to manipulate markets, and it will never bring prosperity, and it will never become just.

Please excuse me tomorrow. I am busy finishing my October Moneychanger monthly newsletter, so won't return with a commentary until Thursday.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, October 18, 2010

If the Gold Price Breaks $1353 It Will Continue in the Same Direction

Gold Price Close Today : 1371.20
Change : 0.10 or 0.0%

Silver Price Close Today : 24.397
Change : 0.125 cents or 0.5%

Gold Silver Ratio Today : 56.20
Change : -0.285 or -0.5%

Silver Gold Ratio Today : 0.01779
Change : 0.000090 or 0.5%

Platinum Price Close Today : 1696.50
Change : -2.50 or -0.1%

Palladium Price Close Today : 589.25
Change : -2.75 or -0.5%

S&P 500 : 1,184.71
Change : 8.52 or 0.7%

Dow In GOLD$ : $168.00
Change : $ 1.22 or 0.7%

Dow in GOLD oz : 8.127
Change : 0.059 or 0.7%

Dow in SILVER oz : 455.96
Change : 2.49 or 0.5%

Dow Industrial : 11,143.69
Change : 80.91 or 0.7%

US Dollar Index : 77.19
Change : 0.186 or 0.2%

Here's a small correction to my Friday note about the performance of US $20 gold pieces 3/2009 to 10/2010. In terms of "dollars per ounce" calculated from the premiums averaged over all grades of the Liberty type and the St. Gaudens type, the Liberty US$20s lost two percent and the St. Gaudens gained 5%. Simple gold bullion gained 46% over the same time, showing once again that numismatic coins do not outperform bullion.

Having cleared that up, let's look at today's markets. I had to take Susan this morning to see her heart doctor in Nashville, so I only got a glance at the market early. At that point the US dollar index was up over 40 basis points and metals were down slightly. Looked like the US dollar index really had made a bottom and would rally, but when I returned at 3:30, 'twasn't quite so.

For the whole day the US dollar index held on to only 18.6 basis points of its gains. High struck about 4:00 a.m. at 77.65, but the rest of the day the dollar steadily rolled downhill. The five day chart shows a seeming double bottom around 76.20, so that now becomes the dollars must-hold point. From Friday over the weekend the dollar made an impulse wave, so today was most likely only correcting that first leg up. That correction ought to have been completed today, meaning the dollar ought to levitate tomorrow. First barrier is today's high, 77.65. A failure now would make the dollar appear even weaker than most everybody already believes. Euro's rise may have broken today.

Let me make clear that dealing with the dollar is like picking up presumptively dead rattlesnakes: they may not be dead enough yet. It is by no means clear to me, at least, that Bernanke is quite mad enough to go through with Quantitative Easing. Why does he need to, since without doing very much more than talk about it the markets have already taken flight? Some radical reversal by the Fed here would really wound silver and gold, so you have to keep braced for that. I'm not predicting that, only pointing out the ever-present possibility of a Surprise Party from the Nice Government Men.

Which proves the point that only a socialist or a Keynesian or an economist could miss, namely, that all government and central bank meddling with the economy only creates more uncertainty, confusion, instability, and in the end, more poverty.

The dollar did not rise enough to scare buyers out of GOLD. The silly Comex close, 10 cents higher at $1,371.20, came at the end of an informative five days. Thursday gold peaked at 1386, then corrected until a low early today (same time as the dollar high, 4:00 a.m.) at $1,353.50. From that low gold steadily marched higher, reaching a $1,375 high at 4:00 p.m. (no cyclicality or deeper meaning suggested by the time). It has backed off that high, but should be ready to roll again come tomorrow morning. Upper boundary of gold are the aforesaid $1,375 and $1,386, while the lower boundary is $1,353. If gold breaks through either of those boundaries, it will continue a ways in that same direction.

Down below lies the 20 DMA at $1,329.79 and a little support at $1,325. since this rally began in August by crossing above the 20 DMA, that same 20 DMA has served as the floor for every correction. Below that lies the 50 DMA, generally a stout backstop for corrections.

Discussing these downside targets does NOT mean that I am looking for a correction. In fact, the 5 day gold chart literally wrests from me a conclusion that it will continue rising. Yes, I know it sounds loony after the long climb we've already witnessed, but the warning signs of breaks aren't there yet, other than the persistent overbought condition. In other words, the only reason to suspect silver and gold is their success. How goofy does that sound?

SILVER also peaked Thursday at 2490c, and has since backed off to a low of 2370c over the weekend. Today it rose all day, closing Comex at 2439.7c, adding a modest 12.5c. Here another range presents itself, from 2490c to 2370c. A break above or below will carry a ways in the same direction as the break. By the way, looking at the old charts leaves one with a 2500c short term target.

The proverb says, "A trend in force remains in force until violated." Uptrend in silver and gold has not been violated, so it remains in force.

STOCKS climbed today. Chart looks uncomfortably like gold's chart, but differs, too. Dow has reached 11,150 twice now, and must either break through or break down. Dow added 80.91 today to close at 11,143.69 while the S&P500 rose by 8.52 to 1,184.71. Do not trust stocks.

On this day in 1469 Ferdinand King of Aragon married Isabella Queen of Castille uniting Spain into one nation. It was the beginning of Spanish magnificence and accomplishment.

On this day in 1685 Louis XIV revoked the Edict of Nantes, which for nearly 100 years had guaranteed toleration for the Protestant Huguenots. The revocation sent most of the remaining Huguenots scattering across the world, to South Africa, Germany, Holland, Virginia, South Carolina, and Alabama. Since they were mostly craftsmen and businessmen, France's loss was everyone else's gain.

On this day in 1767 the boundary line between Pennsylvania and Maryland was at last finished by Mason and Dixon.

On this day in 1989 Hungary was proclaimed a free republic.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Friday, October 15, 2010

Silver and Gold Have Shown Terrifying Strength Lately

Gold Price Close Today : 1,371.10
Gold Price Close 8-Oct : 1,344.20
Change : 26.90 or 2.0%

Silver Price Close Today : 2427.2
Silver Price Close 8-Oct : 2308.7
Change : 118.50 or 5.1%

Gold Silver Ratio Today : 56.49
Gold Silver Ratio 8-Oct : 58.22
Change : -1.73 or -3.0%

Silver Gold Ratio : 0.01770
Silver Gold Ratio 8-Oct : 0.01718
Change : 0.00053 or 3.1%

Dow in Gold Dollars : $ 166.79
Dow in Gold Dollars 8-Oct : $ 169.26
Change : $ (2.47) or -1.5%

Dow in Gold Ounces : 8.068
Dow in Gold Ounces 8-Oct : 8.188
Change : -0.12 or -1.5%

Dow in Silver Ounces : 455.78
Dow in Silver Ounces 8-Oct : 476.74
Change : -20.96 or -4.4%

Dow Industrial : 11,062.63
Dow Industrial 8-Oct : 11,006.48
Change : 56.15 or 0.5%

S&P 500 : 1,176.20
S&P 500 8-Oct : 1,154.15
Change : 22.05 or 1.9%

US Dollar Index : 77.019
US Dollar Index 8-Oct : 77.178
Change : -0.16 or -0.2%

Platinum Price Close Today : 1,699.00
Platinum Price Close 8-Oct : 1,701.30
Change : -2.30 or -0.1%

Palladium Price Close Today : 592.00
Palladium Price Close 8-Oct : 486.90
Change : 105.10 or 21.6%


Goodness gracious! Look at that silver! It gained 118.5 cents in one week. 23.7 cents a day. That leaves even me, the Head Bug of All Silver Bugs, staggered. It gained 5.1% in a single week. Beside that, gold's 2%, $26.90, looks measly.

I climbed down, down into the cellar, brushed through the cobwebs, blew off the dust, and pulled out my ancient silver records from 1979 - 1981. Where, I asked, were the support and resistance levels in those ancient times? Lo and Behold! about where they fall today. Coming down off the peak, gold stopped at 2253c (this week's reaction low was 2233c), and at 2436.5c (this week's high 2490c and today traded around 2425-2435c). Above this lies a squiggle at 2500c made on the way up in 1979, then 3440c on the way down in early 1980 -- not far from my 3400c target for this move. Above that lies a peak at 3956.5c. My point is twofold. First, that the old resistance/support still has some life and second, that very little trading has ever occurred at these levels, and no chart resistance stands above silver until it reaches 3440c, then 3956.5c, then 5000c.

Today the US DOLLAR INDEX jumped up for a change. It made a new low at 76.144, nearly clean through the 76.00s, leapt to 77 resistance, and closed a point thru the mark for good measure. By far 'tis too early to say that portends a rally, but it well might. If the dollar is meditating a rally, it must first clear 77.90. The trend remains down, but after so many days falling, the dollar is due for a dead cat bounce at least. That is sure to panic stock investors, and may spook silver and gold buyers, too. Be warned, stay wary.

A glance at the DOW chart says that Wednesday it peaked at 11,150, and has rolled over ever since. Today it tried to rally, reached 11,141, then fainted. Support remains at 11,000 and 10,900. If you still own stocks, even in an IRA or 401(k), get out while you have time. Dow in Silver Ounces (DiSoz) has fell to a new bear market low this week at 454.38 oz. Stocks lost nearly 21 ounces against silver this week.

SILVER and GOLD have shown terrifying strength lately. In the 29 trading days since 7 September, gold has made 15 new highs. In the last 57 trading days, gold has not once declined 1% or more.

In the 23 trading days since 14 Setpember, silver has posted new highs on 17 days.

Folks, I love this, but it ain't normal. It's begging for a correction, but I appears it won't arrive before 2500c, unless it started today. That correction should prove shallow and short so that silver will resume its ascent toward 3400c. On comex today silver dropped 14c to 2427.2c.

GOLD gave up $5.60 today to close Comex at $1,371.10. Yes, it dropped, but still won $26.90 this week. Unlike silver which hath not yet traded above its all time 5000c high, gold is moving through new territory. Who knows what will stop it? Round numbers? Distance from 200 day moving average? Superman?

The rally toward $1,600 and 3400c remain intact. Hold onto your gold and silver, buy if you haven't bought before, buy more on any correction. Our day has come. This bull market will likely last another 5 years.

The GOLD/SILVDER RATIO plummeted a colossal 1.73 points this week to close at 56.49. It should break through 56 next week. My current target to swap silver for gold is 47.50, but the target from the point and figure chart is 41, and if gold reached $1,600 and silver 3900c, the ratio would be -- 41. I'm going to study this over the next few days. Maybe we will re-adjust our target.

If you do not have an open order with us to swap at 47.50, and you want to exercise the swapping strategy, call us at (888) 218-9226. Have no clue what the swapping strategy is? Go read "Why Silver Will Outperform Gold 400%" at www.the-moneychanger.com/articles_files/mmm_files/silver_files/silver_will_outperform.php

Here's today's lesson in Why NOT to Buy Numismatic Coins. I keep prices for US $20 Liberty and St. Gaudens types in all grades from the Coin Dealer Newsletter. Their premiums have been trending down, down, down since 1998, except for a brief spurt in 2008. Since then they have been falling like a hammer off the top shelf on your unprotected head. I averaged all the premiums on all Liberty type and St. Gaudens type. Here's what I found:

From 13 March 2009 until 1 October 2010, the Liberty series $20 premiums dropped from 219% over gold to 147% over gold, a 33% drop. In dollars per ounce, the $20 Liberties (all grades averaged) actually fell from $1,956.89 per oz. to $1,923.32, a 2% loss.

From 13 March '09 until 1 Oct. 2010, the St. Gaudens series $20 premiums dropped from 175% over gold to 126% over gold. In dollars per oz, the St. Gaudens dropped from $1,567.30/oz to $1,646.32, a 5% gain.

What did plain old ratty gold bullion do over the same period? It rose from $895.60 to $1,306.60, a 146% increase.

I don't care what the salesmen of numismatic coins say, the charts show that they do NOT outperform bullion. In fact, over the last 1-1/2 years, they have spun their tires and gone nowhere while gold rose 146%. True, my figures above average the premium across all grades, but the picture is the same for every single grade, and the higher grades perform worse. You tell me which is the best buy: Numismatics or bullion coins?

Y'all enjoy your weekend.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Thursday, October 14, 2010

Gold Price Added Another $7.20 Today to Reach $1,376.70

Gold Price Close Today : 1376.70
Change : 7.20 or 0.5%

Silver Price Close Today : 24.417
Change : 0.500 cents or 2.1%

Gold Silver Ratio Today : 56.38
Change : -0.878 or -1.5%

Silver Gold Ratio Today : 0.01774
Change : 0.000272 or 1.6%

Platinum Price Close Today : 1716.00
Change : 6.00 or 0.4%

Palladium Price Close Today : 604.00
Change : 7.00 or 1.2%

S&P 500 : 1,173.81
Change : -4.29 or -0.4%

Dow In GOLD$ : $166.59
Change : $ (0.88) or -0.5%

Dow in GOLD oz : 8.059
Change : -0.043 or -0.5%

Dow in SILVER oz : 449.72
Change : -4.81 or -1.1%

Dow Industrial : 11,094.57
Change : -1.51 or 0.0%

US Dollar Index : 76.55
Change : -0.523 or -0.7%

A good friend of mine once taught me a rich proverb: "In a bear market, money returns to its rightful owner." Translated that means that in bull markets every clown with a dollar can invest with the trend and make money. Inevitably, he confuses investing in a bull market with "investing genius." Ends the bull market, and he keeps on trying the same tactic, which no longer works. Thus money travels its circuit from its transitory and foolish owner to its rightful owner.

A corollary of that proverb is, "The market is not benevolent."

Once a month I appear on Catherine Austin Fitts' Solari Report, and tonight's the night. You can subscribe to the Report at http://solari.com/store/the_solari_report/.

It is fallen, its is fallen! The Dollar the Great is fallen! Today the US DOLLAR INDEX lost another 52.3 basis points, 2/3 of one percent, to trade now at 76.548. Yesterday it was above 77, and it has eaten half way through 76 today. Clearly the Nice Government Men are happy with a falling dollar. Stay wary for a sudden rally. It will drive all the faint-hearted before it, especially those in stocks.

Looked at stocks again today, and came up with a target of about 8,000 on the dow. Dow today fell 1.51 to 11,094.57. S&P500 fell 4.29 to 1,173.81. Spent most of the day lower than that, but right at the end -- surprise, surprise -- came some buying out of nowhere to raise the Dow to near unchanged. Bogus as a three dollar bill.

I am going to stop writing that silver and gold must be approaching some sort of correction since they keep leaving tire marks on my face.

Silver's day was tumultuous. Overnight it reached 2486c, then eased off and fell right after the New York open to a low of 2407c. But it climbed to a comex close of 2441.7c, up 50c from yesterday. Right now it's trading at 2467c, and maybe we'll see 2500c tomorrow, unless profit-takers looking forward to the weekend take it down.

GOLD added another $7.20 today to reach $1,376.70, fulfilling the target I mentioned months ago. Moments ago when I looked it was trading at $1,382.10. Gold, too, enjoyed an exciting day, trading as high at $1,386.70 and as low as $1,370, which has now become strong support. Only target I have remains at $1,600.

That US DOLLAR rallying will cause stocks, gold, and silver a problem because they are so overbought, but the dollar appears to have no rally in mind for some time to come.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Wednesday, October 13, 2010

Silver and Gold Repeated Their Tactic of the Last Few Weeks, Dropping One Day and Leaping the Next

Gold Price Close Today : 1369.50
Change : 24.00 or 1.8%

Silver Price Close Today : 23.920
Change : 0.785 cents or 3.4%

Gold Silver Ratio Today : 57.25
Change : -0.905 or -1.6%

Silver Gold Ratio Today : 0.01747
Change : 0.000272 or 1.6%

Platinum Price Close Today : 1710.00
Change : 30.00 or 1.8%

Palladium Price Close Today : 597.00
Change : 9.00 or 1.5%

S&P 500 : 1,178.12
Change : 8.35 or 0.7%

Dow In GOLD$ : $167.49
Change : $ (1.81) or -1.1%

Dow in GOLD oz : 8.102
Change : -0.087 or -1.1%

Dow in SILVER oz : 462.34
Change : 1.47 or 0.3%

Dow Industrial : 11,096.16
Change : 75.76 or 0.7%

US Dollar Index : 77.09
Change : -0.276 or -0.4%

My, oh, my! How my heart rejoices that I am not the poor slug charged with maintaining the dollar's life. Over the weekend the dollar made a low at 77, and now has revisited that today. As oversold as the dollar is, that hints at a foundation for a rally, but the dollar has run that same play before during this fall, only to drop again the next day. A break through 76.90 takes the dollar to 74.

STOCKS bounced today. The Dow added 75.76 to reach 11,096.16 while the S&P500 gained 8.35 to 1,178.12. Dig with a spade, rent a back-hoe, drive tunnels into the earth and you will not be able to dig out any economic reason for stocks rising. Forget not, either, that their P/E ratios and yields are nowhere close to bear market lows. Stay away from stocks, stop your ears to the gurus.

Dow in Silver Ounces today dropped to 462.34, another new low.

Both SILVER and GOLD repeated their tactic of the last few weeks, dropping one day and leaping the next. It takes a sober man's breath away.

Gold opened $1,356.50 traded sideways an hour, then pole vaulted in two steps to $1,373.95. Afterwards it merely slid along top of its 2 hour moving average. On Comex the NGM and bears managed to contain the close below $1,370 at $1,369.50, higher by an astounding $24. Mercy. To my ignorant eyes it appears the last four days put in an A-B-C correction and today it began another upleg.

Is GOLD overbought? Yes, quite. Outside 20 Day moving average envelope. Bumping up on top Bollinger band. Williams % R at top of range and has been since first days of August.

Overbought? Yes, but it's a bull market, and it is going higher.

SILVER sprang a staggering 78.5c to close on Comex at 2391c, right, nearly 2400c. Silver opened the day slowly at 2345c. At 10:00 it began a steady upward march that reached 2385c by 1100 and 2395c by 12:30. In the aftermarket silver costs 2400c an ounce.

A couple of readers have commented that they are holding off buying because I am looking for a correction. If you think that, you have mis-read my commentaries. I have repeatedly warned not to stand in the way of this market. It is a runaway bull. I have repeatedly said that until we reach $1,600 and 3400c, corrections should be shallow.

Silver and gold are in a bull market. Only sensible strategy in a bull market is to buy, and the bull market will bail out even your timing errors.

Whoa! My daughter Liberty just shouted at me that silver has broken through 2400c to 2406c. Yes, it is wild and volatile, but that bull market will always try to shake over every rider. Keep your eyes locked on the horizon. There will be no correction until a correction happens. That could take place any time, but looking at 30 year old price action, tiny resistance (and psychological resistance) awaits at 2500c. After any correction, the price will resume rising fiercely. Risking buying right before a correction might happen is a risk of every bull market, and a fear the bull exploits to shake off as many riders as possible.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Tuesday, October 12, 2010

Silver and Gold Prices are NOT in a Bubble

Gold Price Close Today : 1345.70
Change : (7.60) or -0.6%

Silver Price Close Today : 23.147
Change : (0.200) cents or -0.9%

Gold Silver Ratio Today : 58.14
Change : 0.173 or 0.3%

Silver Gold Ratio Today : 0.01720
Change : -0.000051 or -0.3%

Platinum Price Close Today : 1680.00
Change : -2.00 or -0.1%

Palladium Price Close Today : 588.00
Change : 0.00 or 0.0%

S&P 500 : 1,169.77
Change : 4.45 or 0.4%

Dow In GOLD$ : $169.29
Change : $ 1.12 or 0.7%

Dow in GOLD oz : 8.189
Change : 0.054 or 0.7%

Dow in SILVER oz : 472.78
Change : -2.85 or -0.6%

Dow Industrial : 11,020.40
Change : 10.06 or 0.1%

US Dollar Index : 77.29
Change : -0.148 or -0.2%

Yesterday was a yankee government holiday with the post office closed, but the markets were open. We took the opportunity for a day off.

Frankly, market are out so far off the edge of the curve that it's very difficult to make any intelligent statement about them. No matter what everybody may think, a falling dollar is not the universal penicillin for economic disease.

As always, Wall Street is getting it wrong. They are honking about silver and gold being in a bubble and at a top. Now why should we believe that the same dullards who missed calling the Stock Market Bubble, the Dot Com bubble, the Real Estate Bubble, and even the soap bubble can accurately spot one in silver and gold? Alas, their over-sized Harvard-trained crania have overlooked the most fundamental principle of investing: always identify the primary trend and align your investment with, not against it. But then, they have stocks to sell, stocks that are locked in a bear market (primary down trend), so maybe they cannot afford to meditate on primary trend, let alone mention it.

The MBAs in the skyscrapers are confusing a runaway bull market (primary uptrend) in a third wave up with a bubble. Not only are silver and gold NOT in a bubble, but they will grow wilder, furrier, and more unpredictable, all in one direction: up. Now beware, and overlook not the metals' short-term oversold condition, which could fall off in a sharp, sudden, but shallow correction any time. I don't mean that silver and gold will perpetually rise. The last 60 days or so have been very unusual, fuelled by more than bull fever alone, and that same force is pushing stocks up, too.

Stocks, on the other hand, are locked in a primary down trend (bear market). Remember, primary trends run 15 to 20 years, so this stock bear market won't end before 2015, maybe 2020.

Oh, wow. Did I neglect to mention that the US dollar is also imprisoned in a hopeless primary downtrend, and beyond the technical picture is doomed by the institutional and political framework of central banking and government spending? Well, it is, so Wall Street's other investment offering, bonds, are also a Killer Investment -- that is, they will kill any purchasing power you still retain.

Okay -- anybody confused about where I stand? Good, then let's look at today's market.

Before I say anything about the US DOLLAR INDEX, I want y'all to ponder and keep in mind that under our central banking system, all currency exchange rates are government- manipulated. All means all. Thus if the dollar is falling, it falleth because somebody -- Treasury or Fed Reserve or more likely both -- has decided to let it fall. Ditto if it rises. Not true only if the currency escapes their nasty, damp clutches, and usually that means heads into a collapse.

Thus the buck continues to fall, but here just below 77, from 76.90 to 77.50, the dollar seems to be trying to begin -- maybe -- a little rally. Technically an eentsy-teensy bit of support lieth in the past around 76.60, but 't'ain't huge. Keep your eyes peeled for a dollar rally. It will wreck the party fearsomely, especially in stocks.

STOCKS have climbed above 11,000. Today the Dow augmented by 10.06 to 11,020.40 and the SYP500 embraced another 4.45 points to rest at 1,169.77. Great, great, great, it's broken above the previous high and headed into a new rally! Not quite. It is completing the right shoulder of a gigantic head and shoulders top that measures out a target around 8,000. I am nothing more than a natural born fool, an ignorant ridge runner from Tennessee, but heed my warning and stay away from stocks.

GOLD and SILVER pulled another trick today. Both dropped, silver by 20c to 2314.7c and gold by $7.60 to $1,345.70. So what? Yesterday silver gained 26c and gold $9.10, so for the two days both have netted a rise. I have been observing for the last 2 months or so that instead of indicating weakness, silver and gold often jump -- and high -- the day after a little fall. Maybe they will repeat that performance again tomorrow.

I feel like I have ants crawling in my bones when I say this, but I would keep on buying silver and gold. This well-muscled and determined rally has set its eyes on $1,600 and 3400c.

After the Comex closed silver rose again, higher than yesterday's close. Right now it's trading at 23.31. Silver has thrice bumped against 2045c, looking like a helium balloon searching for a way out. It will pierce the ceiling.

Gold has risen back to $1,352. Both silver and gold appear to have made some sort of high and correction last Thursday. Now they are making good the fall, recovered to rise again. Gold needs to clear $1,355 resistance.

Gold and silver are safe down to $1,325 and 2230c. If they break those levels then a correction has begun. Otherwise, they are headed for the sky. That bunching up on the 6 month gold and silver charts leaves me a bit uneasy, but other than that the fury will continue until it ends.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Thursday, October 07, 2010

The Gold Price Could Drop to its 50 Day Moving Average 1250.87

Gold Price Close Today : 1,333.90
Gold Price Close 1-Oct : 1,316.10
Change : 17.80 or 1.4%

Silver Price Close Today : 2256.5
Silver Price Close 1-Oct : 2203.7
Change : 52.80 or 2.4%

Gold Silver Ratio Today : 59.11
Gold Silver Ratio 1-Oct : 59.72
Change : -0.61 or -1.0%

Silver Gold Ratio : 0.01692
Silver Gold Ratio 1-Oct : 0.01674
Change : 0.00017 or 1.0%

Dow in Gold Dollars : $ 169.67
Dow in Gold Dollars 1-Oct : $ 170.10
Change : $ (0.43) or -0.3%

Dow in Gold Ounces : 8.208
Dow in Gold Ounces 1-Oct : 8.229
Change : -0.02 or -0.3%

Dow in Silver Ounces : 485.20
Dow in Silver Ounces 1-Oct : 491.43
Change : -6.23 or -1.3%

Dow Industrial : 10,948.58
Dow Industrial 1-Oct : 10,829.68
Change : 118.90 or 1.1%

S&P 500 : 1,158.06
S&P 500 1-Oct : 1,146.24
Change : 11.82 or 1.0%

US Dollar Index : 77.393
US Dollar Index 1-Oct : 78.034
Change : -0.64 or -0.8%

Platinum Price Close Today : 1,696.10
Platinum Price Close 1-Oct : 1,676.30
Change : 19.80 or 1.2%

Palladium Price Close Today : 584.80
Palladium Price Close 1-Oct : 570.70
Change : 14.10 or 2.5%


Tomorrow I will be travelling, so I am sending out this weekly summary a day early.

Silver and gold keep on advancing (along with stocks) making new highs every day. The dollar continues it relentless and easy descensus Averni. One wonders whether it will ever return. So far the dollar giveth no hint of a rally, but as far as it fallen, surely it must turn around soon, if only to prove it yet liveth. Stay on guard.

Today silver and gold broke right after the open, but what does it mean? Is it only a hiccup, or a break toward a real correction? This much we know: twas not the dollar's fault. The US dollar today gained a too-tiny-to-notice 0.7 basis point to trade at 77.393. Yet silver dropped 45.5c to 2256.5c (Comex close) and gold lost $12.50 but caught at $1,333.90. Since silver had gained 101.7c in the past two days, today's loss wasn't exactly fatal. Likewise Gold on Tuesday and Wednesday had added $31. Truth is, I am glad to see a fall today. Recent action has simply been unrealistic and unsustainable. This drop will shake out some weak hands.

What did today's drop do? Primarily point out to us where support lies, at $1,325 and $1,330 for gold and 2245c for silver. Watch 2220c and $1,320 also. Gold reached $1,365 and silver 2350c before they began dropping. Probably zillions of sell stops lurk in the shade just beneath present prices, so any decline is liable to be jerky. On the longer correction side, gold could drop to its 50 day moving average (1,250.87). Silver's 50 DMA stands at 1974c.

Often when a correction does occur, it makes two peaks before it drops in earnest. If this is the case, you'll see gold and silver trade back to the highs tomorrow or Monday, then fall off. New highs are necessary to confirm that the rally is continuing.

Don't let today shake you too much. Markets go up, markets go down, progress is made by zigs and zags. It's normal.

Stocks today were mixed. The smaller indices rose a few points, but the Dow lost 19.07 and the S&P500 lost 1.91. Stocks, silver, and gold falling together without any catalyzing stimulus from the dollar suggests all are way overbought. Remember that stocks are in a countertrend rally in a bear market, moving against the primary trend, while silver and gold are moving with the primary trend. Therefore the end of this rally for stocks should be ugly, but shouldn't smart too much for silver and gold.

Hold on to your silver and gold. If they drop to targets noted above, buy more. If they fall further, give them a few days to see where they will settle and then buy more.

On this day in 1571 an alliance of Spanish and Italians smashed the Turkish fleet at the Battle of Lepanto, first naval win in 120 years for the Christians. That cleared the Eastern Mediterranean of Turkish control for some time. The Battle of Lepanto was the last clash of oar-driven ships.

On this day in 1896 Dow Jones first began reporting an average of the prices of 12 industrial stocks in the Wall Street Journal. By keeping my index, the Dow in Gold Dollars, I have one unchanging measure of stocks from 1869 to the present.

On this day in 1913 Ford Motor Co. began operating its first assembly line. It could turn out one car every three hours.

On this day in 1949 was established the infamous and notoriously un-democratic German Democratic Republic. The GDR found a way to make a Marxist economy work: Hire half the people to spy on the other half. When I was attending the Free University of Berlin in 1971 and 1972 the clever East German communists realized that they could not rely on the Vopos (Volkspolitizten) or Volksarmeeists to shoot at every refugee fleeing across the wall and its no-man's-land. Lest one should make good his escape from the Workers' Paradise, they installed machine guns operated by electric eyes. It might get more hateful and cruel than that, but I don't know how.

Y'all enjoy your weekend. Argentums et aurum comparanda sunt --

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Wednesday, October 06, 2010

We are Still at the Early Stages of the Gold Price Bull Market's BIG Rises

Gold Price Close Today : 1346.40
Change : 7.50 or 0.6%

Silver Price Close Today : 23.020
Change : 0.306 cents or 1.3%

Gold Silver Ratio Today : 58.49
Change : -0.458 or -0.8%

Silver Gold Ratio Today : 0.01710
Change : 0.000133 or 0.8%

Platinum Price Close Today : 1713.30
Change : 14.40 or 0.8%

Palladium Price Close Today : 587.75
Change : 9.15 or 1.6%

S&P 500 : 1,159.97
Change : -0.78 or -0.1%

Dow In GOLD$ : $168.39
Change : $ (0.57) or -0.3%

Dow in GOLD oz : 8.146
Change : -0.028 or -0.3%

Dow in SILVER oz : 473.25
Change : -2.25 or -0.5%

Dow Industrial : 10,967.65
Change : 22.93 or 0.2%

US Dollar Index : 77.43
Change : -0.319 or -0.4%

Whooo! When markets rise as fast as silver and gold are rising, it takes away your breath! Remember the wisdom of H.L. Hunt, "Never get really elated in victory; when times are tough, never get down." The world is always changing -- you have to learn how to ride the changes out without losing hope or making a fool out of yourself.

In September 2010 the US Social Security system passed the great watershed. In that month Social Security began paying out more than it took in. Demographics have plainly showed this coming for years, and it will get much worse rapidly. Left alone, social security will metastasize to something like half the federal budget by 2040. But then, social security has always been a Ponzi scheme, it's simply running out of new suckers. That's one reason for illegal immigration, and the push to legalize the still-damp newcomers. The other reasons are the Baby Boomers turning 65 and their becoming the Baby Busters by not having children. It's a demographic nightmare.

How will it be paid? Inflation.

TODAY silver and gold kept on shooting up and the US dollar kept on falling. Stocks stalled.

The US dollar index fell another 31.9 cents to 77.43. Clearly, the Nice Government have a plan, namely, to let the US dollar drop until the economy re-ignites. Good plan. Ought to kick in about, oh, say, 2092.

STOCKS today stalled in confusion. Dow gained 22.93 to close at 10,967.75 but the S&P 500 lost 0.78 to 1,159.97. Other indices were mixed. Looks like one of those Roadrunner cartoons where Wile E. Coyote, chasing the Roadrunner, runs clean off a cliff and churns his legs in mid-air a brief second before he grasps what he's done, then plummets. So stocks are looking bewildered today.

GOLD rose 7.50 to $1,346.40, and is trading in the aftermarket at $1,349. It's looking spooky, nose-bleed high blindingly fast. It gathered and bunched under $1,350 today as if deciding to punch through tomorrow. Don't know how high gold will rise before a correction. Maybe $1375? Do NOT stand in its way.

SILVER added 30.6c today to close Comex at 2302c. Trading now in the aftermarket at 2317.5c. Should reach 2450c. Gold/silver ratio is still falling like an anvil out of a 747 Jumbo Jet. Today nearly broke through 58. No sign there of the rally slackening.

Folks, if they silver and gold behave this way in the green tree, what will they do in the dry? Already these rises are crazy, with new all-time highs day after day, but crazier still is to come. We are still at the early stages of the bull market's BIG rises. The very early stages.

On this day in 1536 died William Tyndale, in Brussels. For translating the Bible into English he was bound to a stake, strangled by the hangman, then burned with fire. His last words cried from the stake, "Lord! Open the king of England's eyes."

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Tuesday, October 05, 2010

Gold and Silver Prices Will Shortly Move Sharply Higher After Any Shallow Retracement

Gold Price Close Today : 1338.90
Change : 23.50 or 1.8%

Silver Price Close Today : 22.714
Change : 0.701 cents or 3.2%

Gold Silver Ratio Today : 58.95
Change : -0.810 or -1.4%

Silver Gold Ratio Today : 0.01696
Change : 0.000230 or 1.4%

Platinum Price Close Today : 1698.90
Change : 33.60 or 2.0%

Palladium Price Close Today : 578.60
Change : 17.84 or 3.2%

S&P 500 : 1,160.75
Change : 23.72 or 2.1%

Dow In GOLD$ : $168.98
Change : $ 0.04 or 0.0%

Dow in GOLD oz : 8.174
Change : 0.002 or 0.0%

Dow in SILVER oz : 477.94
Change : 4.46 or 0.9%

Dow Industrial : 10,944.72
Change : 193.45 or 1.8%

US Dollar Index : 77.81
Change : -0.636 or -0.8%


My last night's suspicions about GOLD and SILVER PRICES were proved true today. They converted tiny losses yesterday into huge jumps today. The GOLD PRICE vaulted $23.50 to close Comex at $1,338.90. The SILVER PRICE strapped on a jet pack and shot up 70.1c to $22.714. In the aftermarket they're trading at $1,341 and $22.90.

Where will they at least pause to take a rest? The silver price could reach $24.50, the gold price $1375, maybe more, but as I keep harping, both will shortly move sharply higher after any shallow retracement.

Here's something to leave you sleepless tonight. Go to http://banktracker.msnbc.msn.com/banks/. Click on your state on the map, and you can access the balance sheet of any bank in your state It will show you the "troubled asset ratio", that is the ratio of bad loans divided by the bank's capital and loan loss reserves. Bad loans include "Loans more than 90 days past due", "non-accruing loans" and "Other real estate owned" (foreclosures). National median is 15.00, i.e., 15%. A graph displays where your bank's troubled asset ratio stands in relation to the national median. If your bank's TRA stands above the national median, better think about a new bank.

Here's some icing for that poisoned cake. How many MORE loans are on the banks' books that, because of the Financial Standards Accounting Board's cowardice, are carried at far above their true value because they no longer need be marked to market?

And how about some poison ice cream for that cake? Jim Sinclair of Mineset reports that Landesbank Baden-Wuerttemberg has sued Goldman Sachs over its $37 million loss on Collateralized Debt Obligations (CDOs). Underlying this is an Ohio case a number of months ago in which Deutsche Bank tried to foreclose on mortgages held in mortgage backed securities. Because they had no originating documents to prove the property had actually been mortgaged, the court threw out their suit. Seems that when folks like Goldman Sachs were aggregating those junk mortgages to securitize them as CDOs or MBSs, they neglected to be finicky about the paperwork and cannot prove the mortgage. No proof, no foreclosure, no right.

German has a phrase for a conceited or foolish person who runs his mouth about how great he is: Er spinnt. He spins, like a spider, mere cobwebs in the air. Lo, and behold! The entire financial system is mere cobwebs, spun out of the greed and imagination of a bunch of rotten spiders.

TODAY'S trading brings back to mind that forecast I made many months ago that gold was targeting $1,375. Looney as that seemed at the time, today gold price stands a bare $35 under that. Whooo! Something we are not seeing is very, very wrong in the world to send the Realizers scurrying into silver and gold. Also, as my friend, The West's Greatest Wholesaler, mentioned this evening, Democrats are doing bright stuff like suggesting a 1% transaction tax on savings accounts, or regulating silver and gold dealers. All this adds up to Lurching, rudderless lurching in the face of true and grave perils. No leader or junior leader has brains enough or guts enough to lead. Instead, they all lurch from side to side as the ship sinks. But let me leave that distasteful subject.

The US DOLLAR today sought oblivion again, dropping 63.6 basis points (0.82%) to 77.811. Rest assured that at this rate it won't take the buck long to chew through the 77s and 76s on its way to 74. Euro's little dip yesterday only filled the gap left on Friday, and the Euro rose again today at 1.3836. Still watch the NGM. Might engineer a sudden dollar rally to catch the market flatfooted.

STOCKS benefitted, too, from the flight out of the dollar. Dow rose 193.45 points (1.8%) to 10,944.72. Dollar fears boosted the S&P500 23.72 to 1,160.75. Mark, however, that these gains could not offset the larger gains by silver and gold. The Dow in Gold Dollars (DiG$) has broken below its G$170 (8.224 oz) support to close today at G$168.72 (8.162 oz). The Dow in Silver Ounces (DiSoz) has plunged to new lows at 477.94 oz, 14 ounces below the old low. Leave stocks to the Spiders.

Last night I watched the first genuinely engaging movie I've seen in a long time, Temple Grandin. It's a story about an autistic girl who figures out cows by doing what the rest of us are too clever to do: watch the cows. It was a superb and satisfying movie. And it will teach you something about herding cows.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

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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.