Thursday, August 27, 2009

The Gold Price Must Close Above $955 then $961 to Break Free of This Trading Range

Gold Price Close Today : 945.50
Change: 1.20 or 0.1%

Silver Price Close Today : 14.220
Change: -3.5 cents or -0.2%

Dow Industrial: 9,580.63
Change: 37.11 or 0.4%

US Dollar Index: 78.11
Change: -0.53 or -0.7%

Right on cue from the dollar, the GOLD PRICE in the aftermarket jumped from a lackluster close up $1.20 at US$945.50 to US$951, where it remains. The SILVER PRICE trailed along with gold. At the Comex close it had dropped 3.5 cents to $14.22, but as I write it is trading at $14.37.

Snappy day for gold, bouncing back like that, but it must close above $955 then $961 to break free of this trading range. Today's market had the feel of control by traders with one eye on the US dollar pit and one eye on the gold pit. This is not big trading, it's dulldom.

August has almost ended, and next week the big traders will return. We'll see what happens then. I expect silver and gold will begin to rally in earnest.

If I had been long dollars (an exotic thought that!), today's action would have made me sell. The dollar index ranged all day from 78.45 - 78.75. Suddenly at 1400 Eastern Time it collapsed, hitting a low of 77.851. It has since recovered a bit and is not as 78.111, down 52.8 basis points. To slip more than 50 basis points on the day after it climbed over 78.33 resistance? Looks awfully weak. I'm still watching the dollar for a surprise rally, but right now that seems about as likely as my becoming an Olympic javelin thrower.

Stocks spent about half the day down as much as 80 points (Dow), but around midday crossed into positive territory, closing up 37.11 at 9,530.63. S&P500 closed at 1,030.98, up 2.86.

I can't remember when I last outlined my survival strategy for y'all, but I want to make sure y'all understand it. First, secure your source of ongoing revenue. Best of all is to have your own small business, but if you work for someone, do everything possible to make sure you will be the very last one laid off. Second, get out of debt. All debt. Third, buy silver and gold. I don't know any other investment in a bull market, certainly not stocks or dollar denominated assets. There simply is nothing else to invest in. Fourth, get out of the city if you can, on a little piece of land where you can at least grow your own food. Lastly, get busy working with your local community to revive your local economy. The silly centralization of the last century with increasing government and corporate power, is now collapsing. It's time to start building a new safer, saner, and more just economy. Start on the ground where you live.

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.