Wednesday, August 19, 2009

If Silver and Gold Prices Don't Break Tomorrow, they Won't Break Down Any Further

Gold Price Close Today : 943.30
Change: 5.60 or 0.6%

Silver Price Close Today : 13.871
Change: -8.5 cents or -0.6%

Platinum Price Close Today: 1,242.50
Change: 8.50 or 0.7%

Palladium Price Close Today: 273.50
Change: 0.20 or 0.1%

Gold Silver Ratio
Today: 68.01
Change: 0.815 or 1.2%

Dow Industrial: 9,272.66
Change: 54.72 or 0.6%

US Dollar Index: 78.51
Change: -0.50 or -0.6%

The GOLD PRICE jumped at midday and knocked on $945's door, hard. Tomorrow might pierce that level, even resolve that long, narrow triangle to the upside (above $960). Low today was $931.90. Gold rose $5.60 to close on Comex $943.30.

The SILVER PRICE'S Comex close made it look weaker than it was today. Silver closed down 8.5 cents at 13.8710, while the gold price rose. That's a non-confirmation, but what does it not confirm? Silver's drop, or gold's rise? I say it is bullish, and gold's strong rise shows that silver's weakness is only passing. (Besides, if I were the NGM and wanted to manipulate gold lower, I would trash the silver market first, where I get more bang for my manipulating buck.)

According to the NYMEX figures, silver supposedly dipped lower today, as low as 13.49 cents, but The Moneychanger never saw that. I never saw it below 13.84. When silver did hit that low, it shot up quickly over 13.90, stayed there most of the trading day, and traded higher in the aftermarket. That 13.8710 Comex close looks like somebody "painting the tape."

If I were short silver or gold, this day's action would send me scurrying to cover and go long. If silver and gold prices don't break tomorrow, they won't break down any further. Think about the US DOLLAR INDEX over the past four days. It bounced off 78.33 support last Friday and rallied Monday and Tuesday. Today shortly after the opening it collapsed off 79.10, and never stopped until it hit 78.34. (There's that number again.) It barely bounced to 78.4, fell again to 78.34, bounced barely, fell again to 78.4, then found sponsorship again and climbed to close the day at 78.506, down 50.1 basis points.

Hogwash. Since 78.33 forms such obvious support, a paranoid like me must suspect the Nice Government Men were busy with the Exchange Stabilization Fund buying dollars to jimmy the market. The dollar really looked weak today, and it has hammered on that 78.33 door once too often. I am tilting against a dollar rally, but dollar needs to break below 78.33 to confirm.

Stocks are just piddling back and forth. Dow closed up 54.72 at 9,272.66, S&P 500 at 995.63, up 5.96.

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.