Thursday, April 03, 2008

Gold has Done Lots of Work, but Hasn't Yet Proved that the Decline has Ended

Gold Price Close Today : 905.00
Gold Price Close Yesterday: 895.2
Change: 9.8 or 1.1%

Silver Price Close Today : 17.447
Silver Price Close Yesteday: 17.147
Change: 30 cents or 1.7%

US Dollar Index Today: 72.22
US Dollar Index Yesterday: 72.23
Change: -0.01 or 0.0%

GOLD and SILVER PRICES rose today, and that's fine, but twas an unexciting day. Underneath gold is very strong support at $890, $872 lowest. But looking above, there are numerous milestones that gold must put behind it: the 50% retracement level, about $955; the $925-$930 resistance area; 38.2% retracement about $937; 10 day moving average at $927.32. All these lie above today's 905 close, but I'm glad to be over the round-number $900 at least. Point is that gold has done lots of work, but hasn't yet proved that the decline has ended.

Looking at similar numbers for silver, $17 has proven firm support, with further strong support underneath at $16.80 and $16.40. But look up: the 10 DMA is at $17.65; 50% retracement at 1888; 20 DMA at $18.93, 61.8% retracement at $19.50; and the last high was at $18.68. That's the target I want most badly to see. Good news is that the 50 DMA is only at $18.12.

If silver and gold prices are going to have another downward push, it will most likely start tomorrow. Keep your eyes peeled. If tomorrow closes higher still, that's a good sign that low prices lie behind us.

The US DOLLAR INDEX had another bad hair day. Only saving grace was that it didn't fall too far, only a couple of basis points. It hammered on 72.80, but for 3 days that gate has been locked to it. A close below 72.15 would be the dollar's death, but I suspect rather that it will move higher over the next few days, up to 73.20 - 72.50 anyway.

STOCKS once again failed to pierce Dow 12,700. Dow keeps knocking at that ceiling, but has failed so far. Perhaps tomorrow? If it fails thoroughly three times, O, bad news. Eschew stocks relentlessly.

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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"

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.