Thursday, December 10, 2009

I Believe the Gold Price Bottomed Yesterday at the $1,116.80 Low.

Gold Price Close Today : 1125.70
Change: 5.30 or 0.5%

Silver Price Close Today : 17.133
Change: 1.5 cents or -3.5%

Platinum Price Close Today: 1420.00
Change: 9.00 or 0.6%

Palladium Price Close Today: 368.00
Change: 1.00 or 2.8%

Gold Silver Ratio Today: 65.70
Change: 0.252 or 0.4%

Dow Industrial: 10,405.83
Change: 68.78 or 0.7%

US Dollar Index: 76.02
Change: -0.30 or -0.4%

My, my, my, isn't that noteworthy? The GOLD PRICE traded down all day from $1,132 before the open to $1,121.40 near the close, then snapped back in 20 minutes to $1,132. Still managed to close on Comex (1:30 Eastern) up $5.30 at $1,125.70.

But is that any more noteworthy than silver? On Comex the SILVER PRICE closes at $17.133, up a meager 1.5 cents, but in the aftermarket trades to $17.43. My, my, my. Sure.

Put your eyeglasses on and stare at that gold price chart. Clearly $1,132 is now the next overhead resistance to beat. Hey! Move over! I want to crawl out further on that limb. I believe gold bottomed yesterday at the $1,116.80 low. Why? Look at the 5 day and 3 day charts for gold. Note the low yesterday, then a falling wedge formed, then it broke out upside, touched back, and traded higher. Or you can view it as an even- sided triangle from yesterday's high and low, with a breakout from the triangle's nose. Further, there is a breakout on the 5 day chart above the 4-day downtrend line.

If 'twas a bottom, tomorrow will close above $1,132, maybe even knock on $1,145. Those are the next two resistance levels to beat. My it-has-bottomed theory would be demolished by a close below $1,120.40. In that case the gold price ought to halt at $1,085 to $1,090.

The silver price on the three day chart has made a double bottom yesterday and today at $17.10. Now it needs to climb over $17.45, then $17.80. It has not yet quite pierced the 5 day downtrend line, but trading above $17.45 and closing there tomorrow will accomplish that. If silver has not already bottomed, 'twill drop to $16.79 (38.2% correction of the 7/09 to 12/09 rise and 25% correction of the Nov. 08 to Dec. 09 rise). Unless in the morning they trade below $17.10 and $1,120, start buying silver and gold. Nibble, at least. Tentatively I can say the correction has ended, but the market will speak for itself on the morrow.

US DOLLAR INDEX fell again today, 4 basis points for a psychology-bashing close below 76 at 75.97. Dollar must close above 76.15 to rally and must not close below 75.80 or it curdles and drops.

STOCKS must close over 10,450, really 10,500, to convince the market they are about to trade higher. On the other hand, they must hold above 10,250 to keep from free-falling. Stay out. Dow closed today at 10,405.83, up 68.78, while S&P500 crept up 6.39 at 1,102.34.

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.