Tuesday, December 01, 2009

The Gold Price has New Support at $1,195

Gold Price Close Today : 1199.10
Change: 18.00 or 1.5%

Silver Price Close Today : 19.180
Change: 68.5 cents or 3.7%

Platinum Price Close Today: 1481.50
Change: 27.00 or 1.9%

Palladium Price Close Today: 381.70
Change: 14.00 or 3.8%

Gold Silver Ratio Today: 62.52
Change: -1.342 or -2.1%

Dow Industrial: 10,471.58
Change: 126.74 or 1.2%

US Dollar Index: 74.43
Change: -0.45 or -0.6%

The GOLD PRICE broke through new resistance at $1,180 around midnight (what in the world happened at midnight Eastern time?) and shot to nearly $1,200. $1,195 blocked it, so it traded sideways $1,190 - $1,195. Then about 11:00 Eastern time it burst skyward to $1,201.50, and has hovered just below $1,200 ever since, and now $1,195 has become new support.

The Comex close was especially malodorous today at $1,199.10, up $18 but exactly 90 measly cents short of the psychologically crucial $1,200. Shadow of the Nice Government Men, I reckon. I'd bet on gold clearing $1,200 tomorrow, NGM notwithstanding.

The SILVER PRICE hit $18.80 resistance about one this morning, smashed down that gate and shot to $19.25. Then it backed off and traded sideways $19.00 - $19.15. I interpret breaking the $18.80 barrier should be the trigger to set silver off outperforming gold.

Gold is monstrously overbought, which argues against more upward motion, but overbought can remain overbought for quite some time. Silver is NOT similarly overbought. Remote possibility remains this is a trap -- silver rises to new high and then can't follow through -- but tomorrow the market will tell you. Can't drop lower than $18.80 and upside probably will close above $19.20. Wow.

What a day in the markets! The US dollar index fell from midnight straight down, clean back to Thursday's low at 74.346. Low was 74.26, and $ index is trading now at 74.43, down 45 basis points. Either the dollar makes a double bottom here with last Wednesday, or it fails. A failure drags the index quickly to 73.50 or lower.

Stocks have now again reached the top of the Dow's range, so it's decision time. Either the Dow pierces and moves to a new high, or fails here & today's prices mark the top for a long time. I have no dog in this fight as I own no stocks and plan to own none. For a long time.

A couple of readers asked me to comment about the mess in Dubai. Fact is, I don't know sic 'em from come here about Dubai, but who needs to? About twice a week I get an email from Mr. Nkwama Ngozzi in Nigeria who wants to sell me gold from the Niger River at 30% below market, if I will only wire him $2 million in advance. How bright do you have to be to recognize there might be a fishhook in that offer?

Likewise, the center of the universe (financial & otherwise) is going to move to Dubai, and build a waterfront high rise on the Palm Jambalaya, and it's all going to show a 200% profit. . . at the end of the year. Don't need to be a bloodhound to smell the dead body underneath all that. Anything that sounds too good to be true, is. Dubai is merely another corpse falling out of the closets of finance and banking, not the first and won't be the last.

So they owe the banks $60 billion or $80 billion? I'll work up a tear sometime next week. The rest of us will go on plowing and building and doctoring and fixing and digging and generally doing what we do to keep the world going, and what happens to arrogant bankers in London, Zurich, and New York affects me less than a mite on a flea. And if the world's whole financial structure collapses on their heads, then the next day the sun rises I will go out and milk my cow and feed my pigs and chickens and won't notice much difference, other than not writing these commentaries any more. And I'll look forward to a world without the Tapeworms.

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.