Wednesday, July 15, 2009

Today Half the World Bought Gold

Gold Price Close Today : 939.10
Change: 16.60 or 1.8%

Silver Price Close Today : 13.203
Change: 34.8 cents or 2.7%

Gold Silver Ratio Today: 71.13
Change: -0.634 or -0.9%

Dow Industrial: 8,579.71
Change: 185.16 or 2.3%

US Dollar Index: 79.34
Change: -0.68 or -0.9%

Sorry I missed sending y'all a commentary yesterday, but I unexpectedly had to accompany my son to Chattanooga with a load of shoats. I didn't get back in time to send a commentary.

It really didn't matter much, anyway, since I had told y'all my outlook on Monday, and that proved enough. I said that as long as the GOLD PRICE didn't close beneath $918, we had probably seen the bottom. Nothing much happened yesterday (gold rose 30 cents, silver rose 7 cents), but today half the world bought gold. It rose $16.60 to close at $939.10 on Comex, while the SILVER PRICE climbed 34.8 cents to end at $13.203.

The gold price now needs to close above $940.10, then jump over $954. Otherwise, gold has simply teased us with yet another rise within a trading range. However, this move feels very strong. Silver confirmed today's gold rise with a respectable 34.8 cent rise, but still needs to confirm a gold breakout by closing over $13.80.

Greatest likelihood here is that silver and gold prices continue to rally. However, gold needs to climb above that $940.10 point to confirm. Gold may be slapped back tomorrow, but should hold above $928, then attack $940.10 again. But whether gold continues to rally, or zigs and zags first, we've probably seen the bottom. In no way should you be short gold or silver here, and if you have been planning to buy, better get about it.

STOCKS rallied today on US DOLLAR weakness. Seems markets love a fainting dollar. Dow rose 220.22 to 8,579.71, and S&P500 rose 23.2 to 929.06. This suddenly breaks stocks out of the downward trading channel, and points to a rise to 8,800 or above.

The US DOLLAR INDEX dropped below 80 again today, down 70 basis points to 79.342. US dollar index is rolling over to the downside. A single close below 79 will likely suffice to send the dollar falling another 200 basis points.

Have y'all noticed that California banks have said NO to accepting the state's IOUs? Would Washington bail out the banks for $8 trillion and not bail out California for a cheapskate $26 billion? Don't count on Washington letting California drown. What's a central bank, for, anyway, but to print money for your friends when they're down? Does this mean more inflation? Can a duck swim? Is a pig's little bottom pork? Does Goldman Sachs run D.C.?

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.