Thursday, December 18, 2008

Gold Price Uptrend Remains in Force, When it Crosses the 200 DMA ($862.61) It Will Only Send Gold Running Higher and Higher

Gold Price Close Today : $859.60
Change: -$7.90 or -0.9%

Silver Price Close Today : $11.089
Change: -30 cents or -2.6%

Gold Silver Ratio: 77.52
Change: 1.348 or 1.8%

Dow Industrials: 8,604.99
Change: -219.35 or -2.5%

US Dollar Index Today: 79.76
Change: 1.16 or 1.5%

The GOLD PRICE hit its 200 day moving average ($862.61) and bounced off. 'Tisn't evident yet whether this means a correction long or short. Not terribly material, since the uptrend remains in force. When it crosses over 200 DMA will only send gold running higher and higher.

The SILVER PRICE has formed a big bowl or rounding bottom on the chart, with the rim about $14 -- or $10.70 -- depending on your viewpoint. Silver might drop back down to $10.85-$10.65 in a typical touchback to breakout point, but the worst is past us and the trend leads much higher.

The Fed's announcement yesterday removed the uncertainty over the dollar, and helped the DOLLAR INDEX rally today. Other than that, there was no particular technical reason for it to turn around here, just the monotony of six days steady plunging. Both the 200 day moving average at 76.89 and the last low at 75.89 lay below where the dollar stopped. It was just time for the dollar index to rebound. Might rally as high as 80 - 80.25, and that rally might take a couple of weeks. That would put silver and gold pricse to sleep over the holidays. Get out of dollars; stay out of dollars. Dollar Index closed up 116 basis points at 79.76. Mercy -- how volatile hath the dollar become!

Stocks are trying to make a stand, but didn't like the rising dollar today. Dow must hold 8300-8250 or risk revisiting 7500. Upside, the Dow won't run until it closes above 9,000. Dow in Gold Dollars (DiG$, the Dow valued in gold) has formed a huge falling wedge, which normally breaks out to the upside. That would take stocks up in a rally against gold. Matters not, I am not tempted by stocks, except for the temptation to run from them hard and fast as my feet can carry me.

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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at:"

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.