Friday, March 07, 2008

Another Reason For Higher Gold And Silver Prices

Below is a major reason for higher gold, silver and precious metal share prices to go a lot higher.

The parties on Wall Street, High Street and other Streets in the English speaking/western world are over. The usual/regular shares, notes and bonds are heading down as selling of them increases. There has simply been too much build up of fraud and debt in the financial system. The Piper is demanding to be paid now.

The almost 30 year long party in shares of all kinds in the US markets is over. The Dow broke below its long term trend line. An argument could be made that the Dow put in a long term double top with the right hand top being higher which is the final strong shake out of the weak shorts.

The first top in the Dow around 2001 was when commodities, gold and silver ** bottomed ** out, and the USD index ** topped ** out.

The top in the US dollar index, around 2001, with its head and shoulders toppping pattern, can be seen in this chart:

In the middle of 2006, the Dow started forming its head and shoulders topping pattern, having since broken down below the neckline. At the same time, the Dow put in a double top with the right hand top being higher, thus being a final strong shake out of any weak Dow shorts hanging around. Classic "text book" topping action. All the fundamentals back up the chart patterns.

There are going to be ULCC (Ultra Large Crude Carriers) worth of US dollars coming out of the stock and bond markets looking for safe havens.

London Metal Exchange: a new all time high.

These massive amounts of exiting US dollars seeking safe havens are another reason for much higher gold, silver, and precious metal share prices. Those safe havens being those things that bottomed at the same time the Dow put in its first top and the US dollar put in its final top.

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