Thursday, January 08, 2009

Gold Could See $20 Drops that Scare You to Death, or Could Jump $30 Tomorrow - Buy on Any Decline, or Any Close Above 880

Gold Price Close Today : $853.9
Change: 12.8 or 1.50%

Silver Price Close Today : $11.072
Change: -0.008 cents or -0.10%

Gold Silver Ratio: 77.12
Change: 1.211 or 1.60%

Dow Industrial: 8,745.57
Change: -24.13 or -0.30%

US Dollar Index Today: 81.63

Confused markets don't do great things. The GOLD PRICE cannot hold above its 200 DMA (857.67), closing up today 12.80, but still below 200 DMA. I suspect both 25 year resistance at $850 and the 200 DMA are tempting smarties to short gold. Present weakness shouldn't last more than a week and shouldn't dip below $820, if that far. A close above $880 signals the weakness has ended, a close below $830 that it will be extended.

Other indicators are equivocal or weak. Be cautious here. The gold price could see $20 drops that scare you to death, or could jump $30 tomorrow. Buy on any decline, or any close above $880.

The SILVER PRICE has held on stubbornly above $11.00, a good sign. Unlike gold, silver is moving up out of a great rounding bottom (reaching back to September) and lies a long way beneath its 200 DMA (now 1418). The barrier silver must crush is $11.50, so a close above that will signal that silver has begun to rally again. Beneath that $10.90 must hold. This is a frustrating sideways fight to break through resistance, but the silver will eventually win. Good time to buy - no guts, no glory.

The US DOLLAR INDEX could not quite reach its 50 day moving average (84.46) before peaking and starting down again. It made a triple top in October - December. This rally-ette from mid-December has failed and turned down. Give it another couple of days and it will turn up again, rise to complete the correction, then resume its fall. Get out of all investments that promise to pay you dollars in the future.

STOCKS spake with forked tongue today, the Dow falling by 24 to 8745.57 while the S&P500 rose 2.56 to 909.21. Dow remains above 50 DMA (8,677) but must climb over 9000. Be patient, 'twill rally & give you a chance to sell the rest of your stocks.

I'll try to get back from Nashville in time for a commentary tomorrow, but may not make it. I have to take Susan to see her heart surgeon. She did a 48-hour monitor this week, and if she passed it, they'll take her off rat-poison (coumadin) and all her other medication. Thank you from all your prayers on her behalf.

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.