Thursday, May 14, 2009

The Gold Price Rose Today $2.50 to Close Right On Resistance at US$928

Gold Price Close Today : 928.00
Change: 2.50 or 0.3%

Silver Price Close Today : 14.020
Change: 2 cents or 0.1%

Gold Silver Ratio: 66.19
Change: 0.084 or 0.1%

Dow Industrial: 8,331.32
Change: 46.43 or 0.6%

US Dollar Index: 82.30
Change: -0.27 or -0.3%

When a market goes flat, it just goes flat, and there's nothing much to say about it until it moves up or down. Big mystery is, is it flat because it has run out of steam, or is the market under tremendous pressure from below and above, pressure which for the nonce is equally balanced.

If that latter is the case, then the break out -- either way -- will be huge.

US DOLLAR INDEX sank today as much as it had risen the day before -- not a harbinger of great things to come. It fell 27.1 basis points to 82.295.

STOCKS (probably thanks to the good offices of the Nice Government Men) rose a massive 46.43 points today to close the down at 8,331.32. S&P500 rose 9.15 to 893.07. The air begins to smell of death.

The GOLD PRICE rose today $2.50 to close right on resistance at US$928. These "up two bucks a day" closes only tell us that somebody is buying gold. Why point that out? Because all the blackshirts in the pits, commercials and professional traders, take no long term position. They only play the greatest odds, and reverse position when proven wrong. Anybody looking at a chart sees big resistance at 920, then at 928, so for those folks it would make sense to sell, and I'm sure sell they have.

Taking that into account, gold's performance of the past week earns considerably more respect. The RSI and MACD indicators say that there is much more room upside possible.

SILVER, honey, why do you work my nerves this way? I would have preferred silver stayed cleanly above 1400, instead of dancing around it. But silver is always the more volatile of the two metals, always more changeable. The great hurdle and target remains 14.50. Today silver rose two cents to 1402 cents.

If silver and gold can hold on tomorrow, remaining at roughly these levels, then next week should see breakout and rally. Otherwise, both will fall back down into the trading channel for more work building a base.

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.