Wednesday, December 02, 2009

The Gold Price Has an Upside Target of $1,300 at Least

Gold Price Close Today : 1212.00
Change: 12.90 or 1.1%

Silver Price Close Today : 19.295
Change: 11.5 cents or 0.6%

Platinum Price Close Today: 1497.00
Change: 27.00 or 1.8%

Palladium Price Close Today: 389.00
Change: 14.00 or 3.7%

Gold Silver Ratio Today: 62.81
Change: 0.296 or 0.5%

Dow Industrial: 10,452.68
Change: -18.90 or -0.2%

US Dollar Index: 74.64
Change: 0.27 or 0.4%

The GOLD PRICE today rose $12.90 to close at $1,212.00, but was trapped all day between $1,206 and $1,217. Gold is badly overbought, but as I am forced to repeat, can get more overbought. Chart is begging for a correction, but can keep rising another 30 days at least. Remember that upside-down head and shoulders gold so laboriously formed over 2008 - 2009 measures out for gold an upside target at $1,300 at least.

The SILVER PRICE (with a high today at $19.42 and low at $19.09) was trapped in a range like gold, $19.10 to $19.40. Silver's indicators simply are not as overbought as gold's. More, the gold/silver ratio actually rose a tadge today. Could gold move sideways while silver climbs faster, sending the ratio down? That would certainly do it, and it's sure silver won't rise while gold falls.

Yes, this rally has lasted a long time already, but it is not over yet. I won't get nervous until gold hits $1,300, although I remain braced for surprises.

So how did stocks fare today? Did they pierce 10,450 and advance? Nope, the Dow fell 19 points to 10,452.68. S&P 500 rose a miniscule 0.38 to close at 1,109.24. Can y'all hear the drums throbbing through the jungle? Bad juju coming, Bwana. Stay out of that jungle, as Tarzan might say.

The Dow in Gold Dollars is collapsing. Even with Dow pushing new highs, today it closed G$178.35 (8.628 oz). Breakdown has begun, and that also signals Snake-eyes for stocks.

The US Dollar index is talking out of both sides of its mouth. Has it bottomed? Has answered one-half of that question, namely, it hasn't fallen through double bottom at 74.245. But all alone, that's not enough. Dollar must also climb off that double bottom and soar above 76. Otherwise 'tis doomed to revisit 73.50 or lower.

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.