Tuesday, May 26, 2009

965 is Now Resistance for the Gold Price and Must be Broken

Gold Price Close Today : 953.30
Change: -5.60 or -0.6%

Silver Price Close Today : 14.591
Change: -9.5 cents or -0.6%

Gold Silver Ratio: 65.33
Change: 0.041 or 0.1%

Dow Industrial: 8,465.29
Change: 187.97 or 2.3%

US Dollar Index: 80.11
Change: 0.08 or 0.1%

One of the tactics of the Nice Government Men (I am guessing) is holding a particular line. Ponder: When the gold price was rising from 400, they held on at 420 a long time, defending that point. Then when that gave way, it was $450, then $500, and they threw in the towel on that and it was the next level up.

I suspect we are watching them do that with the US DOLLAR INDEX at the 80 level. It sinks, and wants to sink, beneath the surface of 80 on toward oblivion and sleep, but somebody keeps digging out the life jackets and raising it above 80. Today it closed up a MASSIVE 8.3 basis points to 80.107. Sniff!? Sniff? What's that smell? Is that three day old mackeral? Well, it's something fishy anyway. (Streaming USD Index is now available on the live gold price charts).

STOCKS today heaved themselves up and climbed almost to last week's highs. Wonder who is buying them? Hope it's not y'all.

The GOLD PRICE Fell back 5.60 today to close on Comex at 953.30, and as I write this 4 hours after Comex close, it still stands at 953.70. The silver price today dropped 9.5 cents to 14.591 cents, but as I write has climbed to 14.615.

Y'all notice this week is following the pattern of last, with a strong close on Friday followed by a big hit on the first trading day of the new week? Could be attributed to floor traders returning from a long weekend and putting on short trades, or could be the NGC coming back from their long weekend.

Either way, gold's problem lies at 965.00, the high after the February peak. This is now the resistance that must be broken. Support lies at 941.50. Gold has cleanly broken out thru its downtrend line, but silver has merely reached its downtrend line. Both remain above 50 and 200 day moving averages. The proverb says, "A bull market always climbs a wall of worry." We're climbing now. I'm biting my nails, but my money is on a new silver and gold uptrend.

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

- Franklin Sanders, The Moneychanger

© 2009, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

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.