Wednesday, July 29, 2009

The Gold Price had Better Not Drop Below $909

Gold Price Close Today : 927.20
Change: -11.90

Silver Price Close Today : 13.253
Change: -48.2 cents

Platinum Price Close Today: 1174.40
Change: -25.00 or -2.1%

Palladium Price Close Today: 252.20
Change: -3.00 or -1.2%

Gold Silver Ratio Today: 69.97
Change: 1.61 or 2.35

Dow Industrial: 9,070.72
Change: 26.00 or 0.3%

US Dollar Index: 78.51
Change: 0.64 or 0.8%

Today the somewhat less than Almighty US DOLLAR INDEX rallied 63.5 basis points to 79.509. That didn't help silver, gold, or stocks. Note, however, that all three were already over-extended when the dollar began to rally, & dollar or no, would have corrected anyway.

The Dollar's chart confuses me a bit. This last leg down ought to have carried further than the last (June) low at 78.33 intraday -- but it stopped short and rallied. The move will have to be accounted a rally if it gets above the present channel's top downtrend line, today about 80.25. Otherwise the Dollar ought to have more downside in its future.

STOCKS have lost upward momentum but haven't fallen yet. They will, but only in a correction, I suspect, before higher prices.

The GOLD PRICE fell off 11.90 today to close at 927.20. That's close enough to count as within the 928 - 930 support. More support lies at 920 - 918, then 912. For technical reasons too complicated to explain here but explained in this month's monthly Moneychanger, the gold price had better not drop below 909. That would signal a terrible and long correction, 3 - 6 months. Personally, I have to bet against that. The gold price fought to hold in this area, then trade sideways through early August -- but the market speaks and I, in humility and sometimes humiliation, listen.

The SILVER PRICE skidded down 48.2 cents to a stop at 13.253. Surprised? You oughtn't be, because the silver price is volatile, so these swings belong to the silver market. Tighten your belt, get used to it. Bottom of this decline ought to be here or 13.00. Now is the time to buy both silver and gold.

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.