Friday, April 17, 2009

Next Week Will Tell the Silver and Gold Price Tale for Some Time to Come

Gold Price Close Today : $867.40
Gold Price Close April 3: $882.20
Change: -14.80 or -1.7%

Silver Price Close Today : $11.785
Silver Price Close April 3: $12.325
Change: -54.00 cents or -4.4%

Gold Silver Ratio: 73.60
Gold Silver Ratio Close April 3: 71.58
Change: 2.02 or 2.8%

Dow Industrial: 8,155.62
Dow Close April 3: 8,083.38
Change: 72.240 or 0.9%

US Dollar Index Today: 85.896
US Dollar Close April 3: 85.626
Change: 0.270 or 0.3%

The GOLD PRICE seems determined to dance with its 200 day moving average (DMA, now 860.75), maybe it will drop as low at 850 - 800. Before the gold price climbs out of this correction it must close above 906, then 920. Be patient.

Looks now like the February high was the seasonal high for the first half of the year. If so, gold & silver prices will see range-bound trading from here until the seasonal June/July bottom.

On the weekly chart gold stands well above its 200 week MA (705.36) but is now at its 50 week MA (869.17). Other weekly indicators are equivocal to down.

When gold takes a beating, the SILVER PRICE gets worked over with an iron pipe. Since last Thursday Gold dropped 1.7% while silver dropped 4.4%.

The Gold/Silver ratio jumped 2.8%, to 73.60, and looks set to drive higher. Do not miss this opportunity to swap gold for silver.

The silver price could conceivably fall to 11.80 or even 11.00 and trade rangebound, 11.00 to 14.50, till the summer seasonal low. So far, under heavy attack silver has held 12.00. It might give on the next assault.

Next week will tell the gold & silver tale for some time to come, the next two months anyway. A strong showing next week means we have seen the worst, a weak showing will take both metals lower.

You will hear shallow commentators by the brigades singing the death of silver & gold, the resurgence of the US economy, the rebirth of the dollar, phoenix-like, from its next of mud. Believe their cobwebs at your own peril. Bear always in mind that markets never move straight up or down, but always in waves, fits, & starts.

The US DOLLAR INDEX hired a new PR agent this week. On favourable economic data (?Fewer plants closed & unemployment roseless than 10%?) the dollar has rallied up to the top of its resistance at 85.896. If the buck breaks through resistance at 86.2, it could rally to 89 before reality again sinks teeth into its carotid. Yet, the philosophical among us (who have learned patience watching the illegal, unconstitutional, wildly suicidal US monetary policy) remember that when a currency goes up, it also comes down. Next week we get bad data, and the dollar drops. Means nothing in the dollar's long march to Oblivion.

STOCKS had better hurry their rally along, as daily indicators are looking awfully high. Expects stocks to top not later than end-May in the range of 9,000 to 9,400.

Next week I will be away traveling with my wife & five of our grandsons in New Mexico. God willing, I'll return on 28 April. Y'all don't worry too much about markets. If you've already bought silver & gold, the trend is your friend. Just wait.

Y'all have a great weekend.

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

- Franklin Sanders, The Moneychanger

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.