Thursday, January 22, 2009

The Gold Price Shows a Firm Uptrend Channel

Gold Price Close Today : $858.20
Change: 8.60 or 1%

Silver Price Close Today : $11.357
Change: 4.2 cents or 0.4%

Gold Silver Ratio: 75.57
Change: 0.480 or 0.6%

Dow Industrial: 8,122.80
Change: -105.30 or -1.3%

US Dollar Index Today: 85.51
Change: 0.26 or 0.3%

The GOLD PRICE shows a firm uptrend channel. Last low touched 50 DA (thank you very much!) and today gold close above its 200 DMA (853.89) at US$858.20, up 8.60. That 200 DMA is a crucial milestone. Another milestone is a close above 857, but not nearly far enough above 857 to suit me. If it has conquered that resistance, tomorrow will be a strong day. The real battle ahead is for gold to conquer 885 and 920+.

Believe me, this will be a fight. When gold passes 920, though, the enemy will flee like mist before the mighty sun.

How significant is the 11.50 barrier for the silver price?There's no resistance above it until 14.00. The 200 DMA is also clue there at 13.83. Only a close below 10.50 will turn silver's picture sour.

Supply has improved for both silver and gold, but in general premiums have not fallen much. From time to time I can buy at favorable premiums, as with Krugerands right now.

But very shortly that supply disappears and premium climbs again. What does it mean? Short supply is not a sign of weak demand.

When I gaze upon the Dow chart, only one thought crosses my mind: "How glad I am somebody else owns that!" Where will a rally come from? Why build that long diving board formation unless somebody is going to take a dive? Add more woe: Other indicators are pointing down. There's little sign of life in stocks. Rally must start soon, if ever.

Markets are so contrary, and the US DOLLAR Index is living proof of that. With all its crazy swings, it has broken out to the upside, through the down trend line, with a target of 88 (max, I expect). Expect this rally to expire with January. Interesting is this: in spite of the dollar index rising 26 basis points, both silver and gold prices rose today. Dollar's wind will have to blow more fiercely, freeze more boldly, to stop those metals.

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.