Thursday, August 20, 2009

The Gold Price Has Not Been Broken

Gold Price Close Today : 940.30
Change: -3.00 or -0.3%

Silver Price Close Today : 13.876
Change: -0.5 cents or 0.0%

Platinum Price Close Today: 1,239.00
Change: -3.50 or -0.3%

Palladium Price Close Today: 274.30
Change: 0.80 or 0.3%

Gold Silver Ratio
Today: 67.76
Change: -0.192 or -0.3%

Dow Industrial: 9,350.05
Change: 70.89 or 0.8%

US Dollar Index: 78.36
Change: -0.14 or -0.2%

Since Monday's low at $930 the GOLD PRICE has been locked in an uptrend. Today it dropped at the open, then built a tight even-sided triangle with a high at $942.90 and a low at $938. Think of a triangle as a coil being compressed. When at last it springs out, it jumps a long way. But the further out into the triangle's nose it trades, the weaker the final breakout will be, i.e., the less distance it will run -- usually.

Gold today reached an equilibrium at $940. Equilibria are high tension states that don't last long. Gold may not rise right away, but it certainly has not been broken, and, now I believe, won't break.

The SILVER PRICE'S last two trading days closely resemble gold's: uptrend from Wednesday, drop on opening, then trading sidewise to upward in a tight, narrow triangle. Silver's triangle looks like a flat topped rising triangle, which usually breaks out upwards.

The US DOLLAR INDEX looked sicker still today. It closed at 78.358, down 14.3 basis points, with a high of 78.667 and a low of 78.299. Most of the day it traded in a 20 basis point range, 78.40 - 78.60. The Dollar just rolled over in a hump from yesterday and melted downhill. Twill surprise me if the dollar doesn't fall through 78.33 support tomorrow and make a long step on its journey to 74.

STOCKS are reaching for 9,400 again, at which point the correction will kick back in and take them lower. Dow today closed up 70.89 at 9,350.05. The S&P jumped over the magical 1,000 point to close at 1,007.37, up 10.91.

I went to the charts today expecting little, but looking at the dollar, gold, and silver, I believe this week has answered my questions. The scrofulous dollar has shot its wad, and LO!no bullet was there. Silver and gold prices have been bloodied, but return unbeaten.

Now the market may hand me my head on a platter tomorrow, I well know, but what I see is what I see.

Whenever I have questions, I come to y'all because someone among you always has an answer. Does anyone have the statement made by the Dutch defenders at Alkmaar to the besieging Spanish in 1578? My books on the Dutch War for Independence are in storage.

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.