Wednesday, December 23, 2009

I Remain Persuaded That We Are Watching the Gold Price Bottom, but the Market Will Certainly Tell Us

Gold Price Close Today : 1093.30
Change: 7.30 or 0.7%

Silver Price Close Today : 17.175
Change: 16.0 cents or 0.9%

Platinum Price Close Today: 1418.50
Change: 28.10 or 2.0%

Palladium Price Close Today: 357.75
Change: 0.00 or 0.0%

Gold Silver Ratio Today: 63.66
Change: -0.170 or -0.3%

Dow Industrial: 10,466.44
Change: 1.51 or 0.0%

US Dollar Index: 77.88
Change: -0.37 or -0.5%

I got home from Nashville too late last night to send a commentary, so I am writing this at 7:00 a.m. CST.

If silver was refusing to confirm gold's monstrous advance on the upside, it is now refusing to confirm its tumble down. Yesterday gold dropped 9.40 to close at $1,086 on Comex, then traded $2 - $4 lower in the aftermarket.

Gold's low came at 1079.20, and overall gold handled a down day not too badly. Will that low hold? Ought to for a while, anyway, as it left behind a spike on the chart. Level to watch today is $1,080. If gold breaks below that, then it drops to $1,070. I remain persuaded that we are watching the gold price bottom, but the market will certainly tell us.

Yesterday silver made its low about 16.75, and it didn't stay there long, just long enough to leave a spike behind, then it closed above 17.00 again, at 17.015, down a measly 1/2 cent. Today silver needs to stay above 16.90, and close above 17.00 cents again. Appears able to do that.

I can only repeat what I said yesterday: when the market hits your target, you buy. Gold and silver have hit my target.

Yesterday the US DOLLAR INDEX rose to 78.302, up 26.5 basis points It shot as high as 78.36, then fell back to traded sideways. This appears to be a shallow correction that won't last long, but if that's true the dollar index shouldn't climb above 80.1, which would be a 25% correction & is nested near the 200 DMA (now 79.44), also a likely target.

STOCKS, looking at the Dow, appear to have left behind a sort of Island reversal since last Wednesday. Dow fell sharply Thursday, from 10,450, traded sideways in a band from 10,350 to 10,250, then yesterday jumped strongly out of that band from 10,350 to 10,400. Result looks like the cross section of a tea cup with a thick bottom. Still, that doesn't solve anything, since 10,250 - 10,500 is the same range the Dow has been jailed in for some time. A break above 10,500 would carry to 11,000. Yesterday Dow closed up 50.79 at 10,164.93 & S&P closed up 3.97 at 1,118.02.

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.