Friday, July 24, 2009

Next Week Gold Might Correct, But Not Lower than $930

Gold Price Close Today : 952.80
Gold Price Close 17-Jul : 937.20
Change: 15.60 or 1.7%

Silver Price Close Today : 13.87
Silver Price Close 17-Jul : 13.398
Change: 47.20 cents or 3.5%

Platinum Price Close Today: 1,189.40
Platinum Price Close 17-Jul : 1,173.60
Change: 15.800 or 1.3%

Palladium Price Close Today: 261.95
Palladium Price Close 17-Jul : 249.00
Change: 12.950 or 5.2%

Gold Silver Ratio Today: 68.70
Gold Silver Ratio 17-Jul : 69.95
Change: -1.26 or -1.8%

Dow Industrial: 9,093.24
Dow Industrial 17-Jul : 8,743.94
Change: 349.300 or 4.0%

US Dollar Index: 78.813
US Dollar Index 17-Jul : 79.478
Change: -0.665 or -0.8%

The GOLD PRICE rose US$15.60 this week to close the week at US$952.80, but on Comex today it closed down $1.70. Gold smashed through $940 like the Jackson through Hooker's Union army at Chancellorsville, then ran to $954, the next resistance. It couldn't quite clear that mark, but has another chance next week, and a chance to clear $968. Even if this rally is destined to fail at US$1,000 (which I doubt), it's virtually certain to reach US$980. Next week gold might correct, but not lower than $930. In fact, I don't believe we will ever see gold drop below $909 again.

Again this week, the SILVER PRICE rose twice as fast as gold, closing the week at $13.87, up 47.2c for the week and 10.5c for the day (Comex close). Silver has now beaten $13.80 resistance, but I really want to see it close above $14.25 to feel more comfortable. The Grand Resistance silver must beat is $16.50.

I think the danger of $12.00 silver has passed,and the rest of the summer will be spent with silver and gold trading in sometimes frustrating sideways direction, but generally upward. Don't let the rally in stocks distract you. Silver and gold are headed higher.

Big news today is that the Dow in Gold Dollars, to which I pointed y'all last week, broke through G$194 (9.385 oz) resistance and has run to its 200 day moving average. It might stop there, or it might rise as high as G$215 (10.401 oz). For a short time, expect stocks to outperform gold, as long as eight weeks. However, this is a countertrend rally. Since August 2009 the DiG$ has fallen from G$925.42 (44.767 oz) to today's G$197.26 (9.544 oz), or 78.7%. This bear market (of stocks in terms of gold) will continue until the whole Dow costs G$41.34 (2.000 oz) or less, once this little countertrend rally ends.

STOCKS showed great confusion today. Dow rose 23.95 to 9,093.24, S&P rose 2.97 to 979.26, while Nasdaq fell 7.64 to 1,965.96, Nasdaq 100 fell 2.42 to 1,599.06. All the rest of the indices were likewise mixed. Now two paths are possible. First, stocks gasp and fail here, about Dow 9000. Second, stocks reach Dow 9,700, then collapse. Either way, anyone who still owns stocks ought to take this as a rare, God-given opportunity to sell them and put the proceeds into silver and gold. You won't get another chance at these levels.

The US DOLLAR index today closed down another 18 basis points at 78.813. It has lost 67 basis points since last week. Literally it has reached the bottom of its range. If it falls more, then it will fall another 200 basis points or more. Get busy, Nice Government Men! You have a market to manipulate!

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.