Thursday, December 17, 2009

Gold's Fall Has Just About Exhausted Itself

Gold Price Close Today : 1106.80
Change: -28.70 or -2.5%

Silver Price Close Today : 17.180
Change: -49.9 cents or -2.8%

Platinum Price Close Today: 1420.00
Change: -33.00 or -2.3%

Palladium Price Close Today: 359.25
Change: -12.50 or -3.4%

Gold Silver Ratio Today: 64.42
Change: 0.195 or 0.3%

Dow Industrial: 10,308.26
Change: -132.86 or -1.3%

US Dollar Index: 76.76
Change: 0.76 or 1.0%

The GOLD PRICE fell steadily all day long after peaking about $1,142 yesterday late. It didn't fall straight down, but rather marched down at a 45 degree angle. Comex close at $1,106.80 (down 28.70) was a new low close and violated the last low close and the last intraday low. No surprise then that the aftermarket took gold further under the water to $1,097.20. Assuming this $1,100 level fails to hold, gold will drop to $1,085 - $1,088 where it will complete a 38.2% correction of the rise from November 2008 to December 2009. Next support is $1,070 then $1,025. However, I expect the bottom to occur with in the next two days, and not lower than $1,085.

Oddly, the SILVER PRICE looked better than the gold price today, Silver's low was $17.05, not a new low. Comex silver closed down 49.9c at $17.18, not a new low close (that came at $17.084 on 11 Dec.) If support at $17.00 crumples, then I expect $16.80 will hold. If not, hello $16.00. A spectacular buying opportunity for silver and gold lurks somewhere in the next few days. Watch out!

Here's an interesting chart that offers a different perspective. A chart of gold measured by the US dollar index.

It closed today at $1,414, falling through its 50 DMA (1465) today to lateral support at $1,418.70. Momentum indicators are very oversold, meaning gold's fall has just about exhausted itself.

Okay, the scrofulous US dollar closed over 77.50 today. In fact, it rose 76.4 basis points to 77.759. NOW it looks like it is rallying. Target is 79.50 where the 200 DMA now stands at 78.60. Dollar could even climb to 83, where there is lateral resistance and the 300 DMA.

STOCKS took a big blow today. Dow dropped 132.86 to close at $0,308.26, barely a point off the low. Same holds for the S&P500, down 13.1 at 1096.8. If the Dow breaks 10,235, it will drop to 10,120 -- and so on.

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.