Friday, December 11, 2009

After 1 January the Gold Price Rally Should Resume and Carry to a High Sometime Mid-February to Mid-March

Gold Price Close Today : 1119.40
Gold Price Close December 4: 1,168.00
Change: -48.60 or -4.2%

Silver Price Close Today : 17.084
Silver Price Close December 4: 18.496
Change: -141.20 cents or -7.6%

Platinum Price Close Today: 1,431.00
Platinum Price Close December 4: 1,442.00
Change: -11.00 or -0.8%

Palladium Price Close Today: 359.60
Palladium Price Close December 4: 373.50
Change: -13.90 or -3.7%

Gold Silver Ratio Today: 65.52
Gold Silver Ratio December 4: 63.15
Change: 2.37 or 3.8%

Dow Industrial: 10,471.50
Dow Industrial December 4: 10,338.90
Change: 132.60 or 1.3%

US Dollar Index: 76.551
US Dollar Index December 4: 75.771
Change: 0.78 or 1.0%

'Twasn't a good week for silver or gold, stocks went no place much, but the scrofulous US dollar rallied a whole 1%.

How oddly markets behave! Between 8:30 and 9:45 a.m. Eastern the US dollar index shot from 75.90 to 76.726, then went graveyard flat to barely lower the rest of the day. Now it's riding at 76.551, up 50.6 basis points but still cowering under the baleful eye of of 76.60. To prove it is rallying beyond any quibble, the dollar index must rise above 77.50. The dollar's momentum indicators are fantastically overbought, but as gold showed us lately, overbought can last a long time. Odds favour the dollar rallying further still.

In its tumble since 2 December gold has already corrected most of its overbought-ness. However, the rally I was looking for yesterday evening came overnight. Gold reached $1,142 but 8:00 a.m. Eastern then fell until noon and settled flatly around $1,115, where it languisheth still. At the Comex close (1:30 Eastern) gold registered $1,119.40, down $6.30.

Because it is trading lower in the aftermarket, and because gold's low close at $1,120 has now been violated and see a correction below $1,050. Rest of the year gold will edge sideways and higher. After 1 January the rally should resume and carry to a high sometime mid-February to mid-March.

Always more volatile, silver has dropped from 19.295 to 17.084 today, losing 221.1 cents or 11.5%. Expect it to fall a little further. Bottom most likely is around 16.78, but silver could drop to 16.00. If silver passes 16.00, it could drop to the 200 DMA at 15.00. The low should be in place by Wednesday, so if you are planning to buy on this correction, you'd better keep an eye peeled.

Yesterday the GOLD/SILVER RATIO smote 65.704 (today it's 65.52), nearly touching the 200 DMA (65.887, a likely target) and the downtrend line. If you have any gold left you want to swap, Monday may be your last chance. (Yes, I said swap GOLD into SILVER.)

The Dow Jones Industrial Average remains trapped in a range from 10,250 to 10,500. To my jaundiced eye it appears to be rolling over in a rounding top, but strange things happen. Internal strength is eroding but stocks could still punch to a slightly higher high before collapsing. Take advantage of stock market strength to sell any remaining stocks, and yes, that includes stocks in your IRA & 401(k). You've been

Y'all enjoy your weekend!

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.