Monday, August 03, 2009

The Gold Price Has Now Broken Above $954-$955 Resistance

Gold Price Close Today : 956.60
Change: 2.90 or 0.3%

Silver Price Close Today : 14.245
Change: 31.2 cents or 2.2%

Platinum Price Close Today: 1,238.40
Change: 24.00 or 2.0%

Palladium Price Close Today: 273.00
Change: 8.00 or 3.0%

Gold Silver Ratio Today: 67.15
Change: -1.296 or -1.9%

Dow Industrial: 9,286.56
Change: 114.95 or 1.3%

US Dollar Index: 77.59
Change: -0.56 or -0.7%

The GOLD PRICE has now broken above $954-$955 resistance, which now becomes support. Gold has pointed its nose at $980 this week, unless it closes below $954.

The SILVER PRICE mirrored gold's performance today. It traded above $14.40 from 8:30 to 12:30 EDT, then -- surprise, surprise -- it fell at 12:30 to close up only 31.2 cents, fully 20 cents lower than it had been trading all day. It settled back to $14.25 - $14.30.

If, as I suspect, $14.25 becomes the new floor of support for silver, then silver has completed an upside-down head and shoulders bottoming formation. Above silver, $16.00 stands like US$1,000 above gold. Silver will move strongly higher this week.

Today the treacherous US dollar proved that last week's rise was only a sucker rally. The US DOLLAR INDEX answered all the rest of our questions today by dropping through 78.33 support to close down 56 basis points at 77.589. That lies below the 77.69 intraday low in December 2008, pointing to a rapid drop to 75.89, the Sept. 2008 intraday low. A drop through 75.89 will carry to 74 support, or, at the worst, to the May 2008 all-time low at 70.70. What a way to run a currency!
Bernanke, Paulson, and Geithner ought to be issued mops and buckets and put to work doing a job suited to their peculiar talents.

STOCKS today rose sharply. The Dow climbed 114.95 to close at 9,286.56, and the S&P500 rose 15.15 to close above one thousand at 1,002.63. Dow will no doubt reach 9,700 on this rally. All sorts of gurus and hungry stock brokers will be crowing this up as a new bull market. Listen not, neither harken to their empty blandishments! Sell stocks and roll the proceeds into silver and gold. This really is your last chance.

It arrests my attention that the Dow in Gold Dollars (DiG$) fell today, in spite of a 115 point rise in stocks. More, the DiG$ cannot pierce G$202 (9.772 oz). Face is, stocks are struggling to hold its own against gold -- and losing.

From 8:30 a.m. to nearly 12:30 p.m. Eastern time, gold stayed above $960. Then it dipped abruptly, suddenly, deeply, for the Comex close, and bounced back over $960. About 1:30 p.m. it fell to the $956 - $958 range. Now I'm not saying that was manipulated, but it certainly looked funny, and shows how little it's worth to watch the Comex close alone. Besides, even if the Nice Government Men didn't meddle in gold (and we know they do) the black shirts who trade on the Comex floor are going to help their own, and after a strong up day let it trade down enough to let their caught-short buddies out with a little skin left.

In any event, a Comex close that shows gold up only $2.90, when most of the day it traded up six or seven dollars, leaves a false impression of the day, and of gold's strength. They're cooking the books.

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.