Monday, December 07, 2009

The Evidence Favours Silver and Gold Prices Advancing Further

Gold Price Close Today : 1163.40
Change: -4.50 or -0.5%

Silver Price Close Today : 18.336
Change: -16.0 cents or -0.9%

Platinum Price Close Today: 1435.70
Change: 1.00 or 0.1%

Palladium Price Close Today: 373.35
Change: 3.00 or 0.8%

Gold Silver Ratio Today: 63.45
Change: 0.257 or 0.4%

Dow Industrial: 10,391.11
Change: 1.21 or 0.0%

US Dollar Index: 75.72
Change: 0.07 or 0.1%

Today's action doesn't clear up the bewilderment left behind Friday's drops, at least not in my mind. If anything, the weight of the evidence favours SILVER and GOLD PRICES advancing further.

When I came in this morning about 10:30 Central, the GOLD PRICE was trading at $1,145 and the SILVER PRICE at $17.97. That didn't last long, as gold rose almost 20 bucks and silver about 30 cents. Comex closes saw the gold price down 5.40 from Friday at $1,163.40 and the silver price down 16 cents at $18.3360. Here's where the bafflement arises: $18.00 and $1,140 are both support areas for silver and gold. So neither followed through significantly on Friday's falls, except to ease down to the next support area, then rise afterward. Think about that: driven down, bounces off support, rises up off the day's lows. That doesn't describe a collapsing market, but on the contrary a strong one.

I'm not a prophet, so have to wait for the market to tip its hand. Breaks below today's lows ($17.84 and $1,135.85) would signal trouble, but holding on here and trading sideways or advancing above Friday's lows and continuing above Thursday's highs means the Rally Machine has been cranked up again.

The US DOLLAR INDEX needs to climb above 76.50, at least 76.00, to prove that it has turned around. Today it rose a meager 7.3 basis points to close 75.72, failing to pierce 76, after a high at 76.18. What does that show? That nobody much was willing to hop on to the dollar and buy it. Indecision. No confidence. Doesn't feel like a market rising, but the dollar takes a long time to turn around, so maybe that fits after all.

STOCKS today are confused also. The Dow rose 1.21 points to close 10,390.11 while the S&P50 fell 2.73 to 1,103.25. Other indices were likewise mixed.

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.