Thursday, October 22, 2009

The Gold Price Must Close Above $1,065 to Resume Its Rally

Gold Price Close Today : 1,057.80
Change: -5.90 or -0.6%

Silver Price Close Today : 17.530
Change: -28 or -1.6%

Platinum Price Close Today: 1,367.40
Change: -2.00 or -0.1%

Palladium Price Close Today: 337.65
Change: -1.00 or -0.3%

Gold Silver Ratio Today: 60.34
Change: -0.327 or -0.5%

Dow Industrial: 10,081.31
Change: 131.95 or 1.3%

US Dollar Index: 75.06
Change: 0.03 or 0.0%

Perplexing. Bewildering. What am I not seeing?

The GOLD PRICE rose $5.90 yesterday, and fell $5.90 today, to close on Comex at $1,057.80. Yet in the aftermarket it's trading at $1,060.10. Why does that bewilder me? Because when a market corrects, well, it corrects, it doesn't hang around and flex its muscles at the highs. Maybe I'm all wrong. Maybe this correction is even shallower than I expected, and gold even much stronger. Or maybe all the fall will come on a single day. As I have been repeating until y'all are holding your hands over your eyes, the gold price must close above $1,065 to resume its rally. Otherwise, it ought to drift down to a low, probably around $1,040, maybe as low as $1,020, before 31 October.

The SILVER PRICE rose 26.7 cents yesterday, and fell 28 cents today, just burning up buying power. Closed today on Comex at $17.53, but in the aftermarket is trading at $17.675. In the last few days SILVER and GOLD PRICES have performed the same way, rising stubbornly in that aftermarket. Almost as if someone were pushing them down on the Comex, against the market's own bent. Is it Nice Government Men manipulating behind the curtains, or just a stubbornly strong market?

Oddly enough, the US DOLLAR INDEX these past few days has remained roughly flat. Therefore 'tis not the dollar moving stocks, or gold or silver. Number to watch here is 75. if the dollar index closes below, say, 74.90, it will fall another 100 basis points. Closed today at 75.055, up 3 basis points.

STOCKS must advance tomorrow, else they leave above them a fatal deadly top. I expect they will move higher, but that is no reason for you to heed their siren song. Stocks are now making a top in their correction from last spring's 6550 low, and within weeks will sink out of sight. Dow closed the day up 131.95 at 10,081.31, having dropped 95 points yesterday. S&P500 rose 11.51 to 1,092.91. Notice the see-sawing up and down. That won't last long.

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.