Monday, October 26, 2009

The Long Expected Gold and Silver Price Correction Arrived Today.

Gold Price Close Today : 1,042.10
Change: -13.50 or -1.3%

Silver Price Close Today : 17.084
Change: -62.7 or -3.5%

Platinum Price Close Today: 1,330.50
Change: -28.00 or -2.1%

Palladium Price Close Today: 331.95
Change: -3.60 or -1.1%

Gold Silver Ratio Today: 61.00
Change: -0.768 or -1.2%

Dow Industrial: 9,867.96
Change: -104.22 or -1.0%

US Dollar Index: 76.01
Change: 0.53 or 0.7%

The correction I have long expected arrived today in GOLD and SILVER PRICES.

Had y'all been watching the GOLD PRICE trade today, you would have seen it trade up to $1,059.80 at 10:00 a.m., then waterfall down to $1,040 by 1:00 p.m. Today's low came at $1,035.80, but I never saw it that low. Comex closed $1,042.10, down $13.50 at 12:30 Eastern time. In the aftermarket the gold price is trading at $1,037.90.

The SILVER PRICE closed on Comex down 62.7 cents at $17.084. Low today has been $16.98, and 'tis now trading at $17.084. Silver's track paralleled gold, dropping from $17.77 at 10:00 to $16.98 by 1:00. It has traded sideways to higher since.

One thing you learn about trading is "Buy your targets." When silver or gold fall to prices you forecast they would reach, you have to squelch your fear and buy. $17.00 and $1,040 have been my longstanding targets, so tomorrow I start buying. Recall and ponder the old market proverb, "Bears get rich, and bulls get rich, but pigs get slaughtered." Low should be posted by Friday, 30 October, so if you were planning to buy on a correction, this is your week.

After bumping along 75.30 the dollar index traded through 75.40 around 10:00 and must have hit a bunch of buy stops, because it rose straight up like your little girl's helium balloon, leaving a runaway gulp. It ran out of steam at 76.118, and has since traded down near 76.

All I can say is, "I told y'all so." When everybody in the world has shorted dollars, nobody's left to sell more, so the next price move has to be up. There's lots of resistance at 76, and all the way to 77.50. One possible target, the 50 day moving average, stands now at 76.95. Another, the 200 DMA, soars above at 81.54.

STOCKS have not yet tipped their hand. Dow today lost another 104.22 points to end at 9,867.96; S&P lost 12.65 to close 1,066.95. Long as the Dow holds on to 9,800, maybe 9,700 most, it still has a chance to make one last thrust to 10,375. Otherwise, make that motion where you draw your thumb like a knife across your throat.

Keep this in mind: the dollar rally is temporary, the dollar rally is temporary, the dollar rally is temporary. Grab this opportunity to buy silver and gold on sale. By the way, I bought a lot of cheap Mexican two and 2.5 pesos today, and some Dutch 10 guilders. Call us if you are interested and please mention (888)218-9226; (931)766-6066

Thursday and Friday this week I will be travelling, so will not publish daily commentaries those days.

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.