Thursday, May 07, 2009

If the Gold Price Closes Above 920 it Will Run Long and Hard

Gold Price Close Today : 915.00
Change: 4.50 or 0.5%

Silver Price Close Today : 14.012
Change: 32 cents or 2.3%

Gold Silver Ratio: 65.30
Change: -1.198 or -1.8%

Dow Industrial: 8,409.85
Change: -102.43 or -1.2%

US Dollar Index: 83.85
Change: -0.13 or -0.2%

The GOLD PRICE climbed another US$4.50 today and closed at US$915. This is good, this is strong, this is upward, but this is not yet a close above $920, which is needed to confirm what silver did today.

The SILVER PRICE rose 32 cents to close on the Comex at 14.012. I like this. It's just what silver needed, but no one seems to be paying attention. No headlines appear touting "Silver the Invincible." I like that even better.

In the market after the Comex close at 12:30 Central Daylight Time both metals trended down. Right now they stand at 910.40 and 13.895. That's okay, really, as long as the gold price holds above 906 and the silver price above 13.80. However, it shows that even veteran traders don't quite trust this rise, mainly because they've seen the gold price beaten back at 920 before. Thus a close above that mark will make believers out of them, and they will reverse position.

If I were the Nice Government Men tomorrow would be about the day I would smack the gold market hard, while doubt rages around the 920.00 hurdle. If they fail to contain gold and it does close above 920.00, twill run long and hard. Notice closely that the GOLD/SILVER RATIO dropped again today, a sign that augurs well for this rally.

The US DOLLAR INDEX continued to slide today, falling 0.132 at 83.845. Lo! How are the mighty fallen! and will fall further. STOCKS today took a breather. The Dow dropped 102.43 to 8,409.85 and the S&P shaved off 12.14 to land at 907.39. Still rallying, still destined to top around 9,000 - 9,400, I'd say.

I haven't mentioned it in a while, but if y'all have been watching the Dow in Gold Dollars lately you've noticed that it couldn't get thru or even near G$200.00 (9.675 troy ounces). Today the DiG$ dropped to G$190.00 (9.191 ounces). Rally has probably ended there, and gold will now begin to outperform stocks again.

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.