Silver and Gold Prices are Both Fighting a Stronger Dollar

Gold Price Close Today : 732.00
Change: -$13.60 or -1.8%

Silver Price Close Today : 9.805
Change: 41.5 cents or -4.1%

Gold Silver Ratio: 74.66
Change: 1.701 or 2.3%

Dow Industrials: 8,693.96
Change: -176.58 or -2.0%

US Dollar Index Today: 87.17
Change: 1.20 or 1.4%

Ouch! Stocks look ready to drop off the cliff again. I hope y'all have sold yours already.

The US DOLLAR INDEX is creating problems for silver and gold prices. Looks like the dollar has finished a correction & broken out upside again into what will probably mark the last leg of its rally. How long might it last? Oh, say, two months, or about to the end of December. Everybody tends to sober up come January 2.

The GOLD PRICE is trending upward (despite today's lower close at $732, down $13.60), but needs that close above $750.

Today's action was mushy, just not terribly enthusiastic. Never mind -- the gold price is building a flat-topped, rising triangle, which formation usually breaks out to the upside. Silver's chart resembles gold, and also shows an uptrend with a flat-topped rising triangle. Today's close at $9.805 might have broken down out of that formation, or it might merely be testing the trend.


But check out the silver price versus the GYX (Index of Industrial Metals).

Silver is now holding its own after dropping from July to mid-September. Since then it has climbed back against the industrial metals to exceed both the July and MARCH highs. More proof that the demand driving silver is monetary, not industrial. Very good sign.

Silver and gold prices are both fighting a stronger dollar. You can hardly expect them to shine on a day when the dollar index gains 120 basis points, now can you? Don't let it bother you: the dollar's days are numbered.

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

Franklin Sanders

www.the-moneychanger.com

Reprinted with permission from The Moneychanger. Franklin Sanders lives on a farm in Middle Tennessee by choice, deals in physical gold & silver, and has been writing and publishing The Moneychanger for nearly 26 years. In 1993 he wrote Silver Bonanza for Jim Blanchard. Last year he published "Why Silver Will Outperform Gold 400% and & The Professional Trading Secrets That Will Make the Most of Your Silver & Gold Investments," still available at www.the-moneychanger.com/order/publications.phtml.

You can sign up for Mr. Sanders' free daily e-mail commentary on gold & silver at www.the-moneychanger.com, and download your free portfolio calculator to keep up with your gold and silver investments.