Monday, November 02, 2009

As Long as Silver and Gold Prices Remain Above $16.00 and $1,025, They Have Bottomed and Resumed Their Advance

Gold Price Close Today : 1,053.40
Gold Price Close October 23: 1,055.60
Change: -2.20 or -0.2%

Silver Price Close Today : 16.431
Silver Price Close October 23: 17.711
Change: -1.2800 or -7.2%

Platinum Price Close Today: 1,332.30
Platinum Price Close October 23: 1,358.50
Change: -26.200 or -1.9%

Palladium Price Close Today: 324.75
Palladium Price Close October 23: 335.55
Change: -10.800 or -3.2%

Gold Silver Ratio Today: 64.11
Gold Silver Ratio October 23: 59.60
Change: 4.51 or 7.6%

Dow Industrial: 9,789.44
Dow Industrial October 23: 9,972.18
Change: -182.740 or -1.8%

US Dollar Index: 76.255
US Dollar October 23: 75.477
Change: 0.778 or 1.0%

So far I have to say that the week of 26 - 30 October saw GOLD and SILVER PRICES complete a correction, the dollar index probably turned up, and stocks may have topped.

As long as SILVER and GOLD PRICES remain above $16.00 and $1,025, we can rest confident that they have bottomed and resumed their advance. Of course they must confirm that, first by gold closing over $1,065. Falling stock market acts as weighty anchor on the SILVER PRICE. Today the GOLD PRICE rose to $1,053.40 at the Comex close, up 13.70. Silver rose 18-1/2 cents on comex to close 1643.1. In the aftermarket they are trading at $1,060.50 and 1650 cents.

Gold/Silver ratio should have topped today.

If the metals have resumed their rally, the gold price should head for $1,300 and the silver price for $24.75. I know, I know, it sounds crazy, but that's what the chart says.

The US Dollar Index has established bottom support at 75.80. Assuming that the chart is tracing out an upside-down head and shoulders, the rally target is 80. Remember that the Dollar is a slow turner. Other indicators (RSI, MACD) show the dollar trading near top of range, so no small chance remains that the dollar may turn down, crash through 75.80, and fall to 74 - 71. But as long as the buck remains above 75.80, presume it is rallying.

STOCKS are in trouble. Further they fall, more distant becomes that 50% correction at 10,375, and less likely. If the Dow breaks 9700 - 9600 in sharp succession, rally is probably finished. Today the Dow finished at 9,789.44, up 76.71 and the S&P closed 1,042.88, up 6.69.

The Dow in Gold Dollars has broken down past G$194 - G$195 (9.385 - 9.433 oz)which argues that stocks have topped.

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.