Tuesday, December 15, 2009

The Gold Price is Sawing Between $1,128 and $1,115, Going Neither Forward nor Backward

Gold Price Close Today : 1122.40
Change: -0.90 or -0.1%

Silver Price Close Today : 17.441
Change: -11.5 cents or 0.7%

Platinum Price Close Today: 1446.80
Change: 2.60 or 0.2%

Palladium Price Close Today: 364.50
Change: -1.40 or -0.4%

Gold Silver Ratio Today: 64.35
Change: -0.479 or -0.7%

Dow Industrial: 10,452.00
Change: -49.05 or -0.5%

US Dollar Index: 76.91
Change: -0.22 or -0.3%

Friday through Monday the US DOLLAR INDEX traded out into the nose of a long even-sided triangle. Early today it broke through 76.60 resistance, jumped straight up to 77.10, then faded to the present 76.992, up 56.3 basis points. Chart looks like a tired crane going to sleep. It ought to close above 77 next day or two, then we will see just how lazy and feckless this rally really. At 77.50 resistance it will really have to go to work.

Today's gold low at $1,111.60 confirmed two similar lows last Friday and Saturday, painting a double bottom of sorts. Gold is sawing between $1,128 and $1,115, going neither forward nor backward. Who knows, we might have already seen the bottom in Friday's crisis. Till January we may be plagued with a sideways market talking out of both sides of its mouth (that's the English translation of "equivocal"). Right now we can only wait for breakout one way or the other: over $1,128 and then $1,142, or below $1,110. In between lies merely consolidation & marking time.

Silver made a V-bottom Friday at 1688, rose and has since twice tested & defended 1710c. However, like gold, silver is rangebound between 1710c and 1740c (then 1760c). Can't say much till silver tells us which way it is going by a breakout.

Silver & gold have both worked off their overbought conditions, and are I suspect very near a bottom. Rally should re-ignite in January.

Silver today rose 11.5c to 1744.1c, while gold fell 90c to $1,122.40. Confusion.

STOCKS gav e the lie to that marginal upside breakout yesterday by opening lower and staying there all day. The Dow closed at 10452, down 49.05 & S&P500 closed at 1,1073, down 6.18. Dow coiuld still spike higher briefly, but this game will end in tears by mid-January latest.

I did some fascinating research on the Gold/Silver Ratio chart today, and have found an indicator that very, very reliably points to a much lower ratio. In addition, the ratio is either at or near its high, which implies silver & gold are near their lows.

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.