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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
The-MoneyChanger.com

© 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.



Tuesday, December 22, 2009

When a Market Hits Your Targets, Reason & Courage Allow Only One Course: Close Your Eyes and Buy

Gold Price Close Today : 1095.40
Change: -15.40 or -1.4%

Silver Price Close Today : 17.020
Change: -28.50 cents or -1.6%

Platinum Price Close Today: 1414.00
Change: -24.00 or -1.7%

Palladium Price Close Today: 362.00
Change: 2.50 or 0.7%

Gold Silver Ratio Today: 64.36
Change: 0.170 or 0.3%

Dow Industrial: 10,197.47
Change: -93.79 or -0.9%

US Dollar Index: 78.01
Change: 0.35 or 0.5%

I apologize for missing y'all yesterday evening, but it was St. Thomas' Day & I ran out of day before I got to write a commentary. Today I have to take my wife up to Nashville Christmas shopping, so I may miss y'all this evening as well. But this is written at 8:15 a.m., and yesterday's events give us a pretty good handle on markets since my targets have been reached.

US DOLLAR INDEX rose 35 basis points to 78.01. The dollar is trying to break through a double top Friday and Monday at 78. Overnight it tried to trade higher, but now is below 78 and wallowing in the waves. That would follow the typical dollar pattern, a burst to strength then failure to follow through. Soon should come 79.5 and the 200 DMA (79.49). Don't be scared: it's only the bogeyman.

STOCKS remain range-bound. Yesterday Dow closed up 85.25 at 10,414.14 and S&P 500 up 11.58 at 1,114.05. Range-bound is range-bound, & there's nothing to say about it until it breaks out of that range. Seems the Nice Government Men are in there buying, trying to drive it higher. Lots of luck. Bias is down, but even as I say that remember that stocks could make another push up that might take the Dow as high as 11,000 amid cries that a new day has dawned. It hasn't, some NGM just turned on a flashlight, & the batteries WILL run down.

SILVER & GOLD have touched my targets in overnight trading. Gold made a low at $1,085.75, which smites my targets, namely, a 38.2% correction of the Nov. 08 - Dec. 08 rise, & 25% of April 09- Dec 09.

Earlier this morning gold was pitty-patting with the $1,085 level, but the London fix was $1,094 and gold now sits at $1,092. Options here are (1) a further drop to $1,070, or (2) this is the bottom limit of the drop, an early Christmas present for you.

SILVER traded down to 16.80 overnight, fulfilling my targeted 25% correction of the 7/09 - 12/09 rise and 38.2% of the 11/08-12/09 rise. Silver stands at the moment of truth. Either she holds 16.80 or falls to 16.50-16.00.

O Fear! O Greed! What strait places you bring us to! When a market hits your targets, reason & courage allow only one course: close your eyes and buy. Swallow fear, swat greed, and buy.


Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Friday, December 18, 2009

Weakness Next Week Could Take the Gold Price to $1,085 - $1,088 or even $1,070 That Would Mark the Low for the Correction

Gold Price Close Today : 1,110.80
Gold Price Close 11-Dec :1,119.40
Change: -8.60 or -0.8%

Silver Price Close Today : 17.30
Silver Price Close 11-Dec : 17.084
Change: 22.10 cents or 1.3%

Platinum Price Close Today: 1,429.20
Platinum Price Close 11-Dec : 1,431.00
Change: -1.80 or -0.1%

Palladium Price Close Today: 364.25
Palladium Price Close 11-Dec: 359.60
Change: 4.65 or 1.3%

Gold Silver Ratio Today: 64.19
Gold Silver Ratio 11-Dec: 65.52
Change: -1.33 or -2.0%

Dow Industrial: 10328.89
Dow Industrial 11-Dec: 10471.5
Change: -142.61 or -1.4%

US Dollar Index: 77.733
US Dollar Index 11-Dec: 76.551
Change: 1.18 or 1.5%

The week doesn't lie, as they say. Now there's a heap of blowing out of both sides of the mouth, but there's no lie. 'Tis up to us to hear what it's saying.

First let's talk about my least favorite subject, the scrofulous US Dollar. As I suspected, its rally hath begun, but 'tain't much. Took it forever to get above 77.50, but now it has & so confirmed that it is rallying. Target is 79.50 or even 83 with a strong tailwind & maybe another world-wide liquidity crisis. But I expect this rally to show itself short-lived and shallow, and here's why: silver & gold are not signaling, or on schedule for, a huge correction, & a gargantuan dollar rally would send silver & gold down sharply. So stay out of the dollar's way for a while, 'cause it's climbing higher.

STOCKS remain range-bound with the Dow between 10,500 and 10,250. Still looks to me like the Dow is rolling over to the downside, but between now & year end it might spike as high as 11,000, meaning nothing more than a cap on this rally. Continue to ignore Wall Street's siren song. Stay away from stocks.

Did y'all notice that gold did NOT follow through on yesterday's fall? On Comex it closed at $1,110.80, up $4. That argues that gold may have bottomed, but then, this is Friday & because people are closing out positions on Friday & taking profits for the week, sometimes Friday's close is a little distorted. I was expecting the low to hit this week, and it probably did yesterday. However, weakness next week could take gold to $1,085 - $1,088 or even $1,070. That would mark the low for the correction.

Now some of y'all might have wrongly concluded that I am a blind perma-bull for silver & gold, & that's why I keep looking for a bottom, & y'all would be dead wrong. But when you're in a bull market, your interpretative bias ought to be with the bull. There's no reason to forecast that the current correction will be other than short and shallow. To come to that silver & gold would have to smash through some really stringy, tough resistance, & they haven't.

Perma-bull? Not me. There is a time for all things. With investing there is a time to buy, & a time to sell. Never forget it, because that is the most common mistake investors make: they can't sell.

Now look at silver, sweet silver. On Comex today it rose 12.5 cents to 1730.5. Silver's low so far came last week at 1708.4. On the downside silver might drop to 1680. If silver & gold drop farther, it will happen early next week. Do not wait for further lows if you see gold close above $1,132 or silver above 1770c. Go ahead & buy, because those closes will confirm that the metals have turned around.

Right now I half believe we have seen the lows. Whether so or they come next week, metals will then trade sideways to higher & take off after 1 January. So whether we touch those lows I've listed above, or close above the breakouts above, I would buy my silver or gold before year end.

Speaking of year-end, let me give y'all our publishing schedule. I will disappear on Christmas Eve, 24 December, & not return until Epiphany, January 6. Not only will I be celebrating the Twelve Days of Christmas, but my youngest son Zachariah will be getting married out in Washington State on New Year's Eve. So the whole mob of us will be trooping out there. I promise y'all I will kick up my heels in Seattle, even if they won't be able to understand a word I say. Zach is the next to the last of our seven children to get married, & a celebration is in order.

Y'all enjoy your weekend!


Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



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
The-MoneyChanger.com

© 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.



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
The-MoneyChanger.com

© 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.



Friday, December 11, 2009

After 1 January the Gold Price Rally Should Resume and Carry to a High Sometime Mid-February to Mid-March

Gold Price Close Today : 1119.40
Gold Price Close December 4: 1,168.00
Change: -48.60 or -4.2%

Silver Price Close Today : 17.084
Silver Price Close December 4: 18.496
Change: -141.20 cents or -7.6%

Platinum Price Close Today: 1,431.00
Platinum Price Close December 4: 1,442.00
Change: -11.00 or -0.8%

Palladium Price Close Today: 359.60
Palladium Price Close December 4: 373.50
Change: -13.90 or -3.7%

Gold Silver Ratio Today: 65.52
Gold Silver Ratio December 4: 63.15
Change: 2.37 or 3.8%

Dow Industrial: 10,471.50
Dow Industrial December 4: 10,338.90
Change: 132.60 or 1.3%

US Dollar Index: 76.551
US Dollar Index December 4: 75.771
Change: 0.78 or 1.0%

'Twasn't a good week for silver or gold, stocks went no place much, but the scrofulous US dollar rallied a whole 1%.

How oddly markets behave! Between 8:30 and 9:45 a.m. Eastern the US dollar index shot from 75.90 to 76.726, then went graveyard flat to barely lower the rest of the day. Now it's riding at 76.551, up 50.6 basis points but still cowering under the baleful eye of of 76.60. To prove it is rallying beyond any quibble, the dollar index must rise above 77.50. The dollar's momentum indicators are fantastically overbought, but as gold showed us lately, overbought can last a long time. Odds favour the dollar rallying further still.

In its tumble since 2 December gold has already corrected most of its overbought-ness. However, the rally I was looking for yesterday evening came overnight. Gold reached $1,142 but 8:00 a.m. Eastern then fell until noon and settled flatly around $1,115, where it languisheth still. At the Comex close (1:30 Eastern) gold registered $1,119.40, down $6.30.

Because it is trading lower in the aftermarket, and because gold's low close at $1,120 has now been violated and see a correction below $1,050. Rest of the year gold will edge sideways and higher. After 1 January the rally should resume and carry to a high sometime mid-February to mid-March.

Always more volatile, silver has dropped from 19.295 to 17.084 today, losing 221.1 cents or 11.5%. Expect it to fall a little further. Bottom most likely is around 16.78, but silver could drop to 16.00. If silver passes 16.00, it could drop to the 200 DMA at 15.00. The low should be in place by Wednesday, so if you are planning to buy on this correction, you'd better keep an eye peeled.

Yesterday the GOLD/SILVER RATIO smote 65.704 (today it's 65.52), nearly touching the 200 DMA (65.887, a likely target) and the downtrend line. If you have any gold left you want to swap, Monday may be your last chance. (Yes, I said swap GOLD into SILVER.)

The Dow Jones Industrial Average remains trapped in a range from 10,250 to 10,500. To my jaundiced eye it appears to be rolling over in a rounding top, but strange things happen. Internal strength is eroding but stocks could still punch to a slightly higher high before collapsing. Take advantage of stock market strength to sell any remaining stocks, and yes, that includes stocks in your IRA & 401(k). You've been
warned.

Y'all enjoy your weekend!

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



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
The-MoneyChanger.com

© 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.



Wednesday, December 09, 2009

The Sharpest Plunge Comes at the First, then it Begins Trading Up and Sideways

Gold Price Close Today : 1120.40
Change: -$22.4 or 2%

Silver Price Close Today : 17.158
Change: -62.7 cents or -3.5%

Platinum Price Close Today: 1417.10
Change: -5.00 or -0.4%

Palladium Price Close Today: 368.75
Change: -6.00 or -1.6%

Gold Silver Ratio Today: 65.30
Change: 1.043 or 1.6%

Dow Industrial: 10,337.05
Change: 51.08 or 0.5%

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

Gold was fine, bouncing along between $1,145 and $1,150 when it tried to run $1,152.50 about 11:00 am (Eastern). Attempt failed, then gold fell through $1,145 all the way to its low at $1,124.30 about 3:00 p.m. On Comex gold tumbled $20.60 to $1,142.80, then fell further in the aftermarket. Right now it's trading from $1,126 to $1,131.

Today gold fell through its 20 DMA (1,159.04). That sets up two diverse targets: about $1,100 lateral support coinciding with an $1,094 50 DMA, OR $1,085 (the 25% correction of the Nov. 2008 to Dec. 2009 move and 38.2% correction of the end-April 2009 to Dec. 2009 move.)

Now we have to reckon with a correction lasting two to four weeks. Remember, though, that the sharpest plunge comes at the first, then it begins trading up and sideways.

SILVER closed on Comex down 55.1 cents to 17.785. Today's low (17.445) roughly matches the Thanksgiving day low (17.67), and also takes silver below its 20 and 50 DMAs. Next support is 16.77, then 16. If silver can't hold back the tide, the 200 DMA stands at 14.36. (Markets in a primary uptrend -- bull market -- from time to time correct (fall) to their 200 DMA, which acts as a floor beneath the market.)

Let reason, balance, and fair-mindedness wash over y'all for a moment. If y'all thought it was loads of fun riding this bull up, then don't complain when he stumbles to his knees. He will rise again.

Yahoo, the US DOLLAR INDEX finally rose today, and right now is trading at 76.198, up 43.1 basis points. The $ Index crossed above its 20 DMA (75.15) two days ago and today closed above its 50 DMA (75.68). Unless 76.50 resistance stops it, 'twill shoot for 77 - 77.50 where stronger resistance awaits. Odd, even at these low levels the dollar's momentum indicators appear strongly overbought.

Lo, both silver and gold were vulnerable to reactions after their extended rises, but one wonders -- just idly wonders -- whether their fall got a shove from the Nice Government Men? Or the dollar got a leg up? Why would they do that? Oh, oh, did I forget to mention that Bernanke had a hearing this week in congress about his re-appointment as Fed chairman? Naaawww, not a chance those things could be connected. . . . Is there?



Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Tuesday, December 08, 2009

Now We Have to Reckon With a Gold and Silver Price Correction Lasting Two to Four Weeks

Gold Price Close Today : 1,142.80
Change: -$20.60

Silver Price Close Today : 17.785
Change: -55.1 cents

Platinum Price Close Today: 1411.20
Change: -20.40 or -1.4%

Palladium Price Close Today: 365.95
Change: -1.35 or -0.4%

Gold Silver Ratio Today: 63.45
Change: 0.257 or 0.4%

Dow Industrial: 10,285.97
Change: -104.14 or -1.0%

US Dollar Index: 76.20
Change: -0.43 or -0.6%

Market certainly made itself clear today. The GOLD PRICE was fine, bouncing along between $1,145 and $1,150 when it tried to run $1,152.50 about 11:00 am (Eastern). Attempt failed, then the gold price fell through $1,145 all the way to its low at $1,124.30 about 3:00 p.m. On Comex gold tumbled $20.60 to $1,142.80, then fell further in the aftermarket. Right now it's trading from $1,126 to $1,131.

Today the gold price fell through its 20 DMA (1,159.04). That sets up two diverse targets: about $1,100 lateral support coinciding with an $1,094 50 DMA, OR $1,085 (the 25% correction of the Nov. 2008 to Dec. 2009 move and 38.2% correction of the end-April 2009 to Dec. 2009 move.) Now we have to reckon with a correction lasting two to four weeks. Remember, though, that the sharpest plunge comes at the first, then it begins trading up and sideways.

The SILVER PRICE closed on Comex down 55.1 cents to $17.785. Today's low (17.445) roughly matches the Thanksgiving day low ($17.67), and also takes silver below its 20 and 50 DMAs. Next support is $16.77, then $16.00. If silver can't hold back the tide, the 200 DMA stands at $14.36. (Markets in a primary uptrend -- bull market -- from time to time correct (fall) to their 200 DMA, which acts as a floor beneath the market.)

Let reason, balance, and fair-mindedness wash over y'all for a moment. If y'all thought it was loads of fun riding this bull up, then don't complain when he stumbles to his knees. He will rise again.

Yahoo, the US DOLLAR INDEX finally rose today, and right now is trading at 76.198, up 43.1 basis points. The $ Index crossed above its 20 DMA (75.15) two days ago and today closed above its 50 DMA (75.68). Unless 76.50 resistance stops it, 'twill shoot for 77 - 77.50 where stronger resistance awaits. Odd, even at these low levels the dollar's momentum indicators appear strongly overbought.

Lo, both silver and gold prices were vulnerable to reactions after their extended rises, but one wonders -- just idly wonders -- whether their fall got a shove from the Nice Government Men? Or the dollar got a leg up? Why would they do that? Oh, oh, did I forget to mention that Bernanke had a hearing this week in congress about his re-appointment as Fed chairman? Naaawww, not a chance those things could be connected. . . . Is there?

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, December 07, 2009

The Evidence Favours Silver and Gold Prices Advancing Further

Gold Price Close Today : 1163.40
Change: -4.50 or -0.5%

Silver Price Close Today : 18.336
Change: -16.0 cents or -0.9%

Platinum Price Close Today: 1435.70
Change: 1.00 or 0.1%

Palladium Price Close Today: 373.35
Change: 3.00 or 0.8%

Gold Silver Ratio Today: 63.45
Change: 0.257 or 0.4%

Dow Industrial: 10,391.11
Change: 1.21 or 0.0%

US Dollar Index: 75.72
Change: 0.07 or 0.1%

Today's action doesn't clear up the bewilderment left behind Friday's drops, at least not in my mind. If anything, the weight of the evidence favours SILVER and GOLD PRICES advancing further.

When I came in this morning about 10:30 Central, the GOLD PRICE was trading at $1,145 and the SILVER PRICE at $17.97. That didn't last long, as gold rose almost 20 bucks and silver about 30 cents. Comex closes saw the gold price down 5.40 from Friday at $1,163.40 and the silver price down 16 cents at $18.3360. Here's where the bafflement arises: $18.00 and $1,140 are both support areas for silver and gold. So neither followed through significantly on Friday's falls, except to ease down to the next support area, then rise afterward. Think about that: driven down, bounces off support, rises up off the day's lows. That doesn't describe a collapsing market, but on the contrary a strong one.

I'm not a prophet, so have to wait for the market to tip its hand. Breaks below today's lows ($17.84 and $1,135.85) would signal trouble, but holding on here and trading sideways or advancing above Friday's lows and continuing above Thursday's highs means the Rally Machine has been cranked up again.

The US DOLLAR INDEX needs to climb above 76.50, at least 76.00, to prove that it has turned around. Today it rose a meager 7.3 basis points to close 75.72, failing to pierce 76, after a high at 76.18. What does that show? That nobody much was willing to hop on to the dollar and buy it. Indecision. No confidence. Doesn't feel like a market rising, but the dollar takes a long time to turn around, so maybe that fits after all.

STOCKS today are confused also. The Dow rose 1.21 points to close 10,390.11 while the S&P50 fell 2.73 to 1,103.25. Other indices were likewise mixed.


Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Friday, December 04, 2009

Take This Gold and Silver Price Correction as an Opportunity to Buy More, Cheaper

Gold Price Close Today : 1,168.00
Gold Price Close November 25: 1,187.00
Change: -19.00 or -1.6%

Silver Price Close Today : 18.496
Silver Price Close November 25: 18.768
Change: -27.20 cents or -1.4%

Platinum Price Close Today: 1,442.00
Platinum Price Close November 25: 1,475.30
Change: -33.30 or -2.3%

Palladium Price Close Today: 373.50
Palladium Price Close November 25: 375.20
Change: -1.70 or -0.5%

Gold Silver Ratio Today: 63.15
Gold Silver Ratio November 25: 63.25
Change: -0.10 or -0.2%

Dow Industrial: 10,338.90
Dow Industrial November 25: 10,464.40
Change: -125.50 or -1.2%

US Dollar Index: 75.771
US Dollar Index November 25: 74.346
Change: 1.43 or 1.9%

Whoo--eee, big surprise this week for those who believe that GOLD and SILVER PRICES always rise and the scrofulous US dollar always falls.

Today the US DOLLAR INDEX broke through 74.80 about 8:30 a.m. and left behind two runaway gaps. It climbed all day reaching 75.936 around 3:00 p.m. Right now its trading 75.771, up 114 basis points for the day.

On a weekly chart this looks like nothing, but on a daily chart today's action implies a move to 77.50, provided the dollar can close above 76.50 next week. Odds favour a dollar rally here. No big deal. A corpse will sit up, too, if you hit him with enough electricity. After the jolt, he's still dead.

Now y'all remember I am no prophet, only a poor Tennessee ridge runner and natural born fool turned loose with a forecast, so realize that I am making educated guesses here. If y'all had been carefully watching, you would have noticed that the bottoms in July, mid-August, end-September, and October all happened between 4% & 4.8% down from their preceding peaks. On 2 December gold made an intraday peak at $1,226.40. A 4.8% drop from there takes you to $1,170.23, not far off today's $1,168.80 close (down a painful $48.60).

So where this correction is headed is not so easy to gauge.

If the GOLD PRICE does not catch here or around $1150 - $1160 (the 20 day moving average is now 1156.34), it could drop to $1,088. Another candidate is a 25% correction of the April to December move from $865 - $1,226, namely, $1,136.05. From a raw look at the chart, big support comes in at $1,070. Gold could drop further but it could just as well turn around Monday and slap everybody's jaws. Either way, take this correction as an opportunity to buy more, cheaper. After this correction, gold will take off again and you'll be moaning and complaining to yourself, "Why didn't I buy when it dropped?"

The SILVER PRICE, not as overbought as gold, has not corrected as much as the gold price. No sooner had I let fly the words from my mouth yesterday that it wasn't to be expected that the Gold/Silver Ratio would fall by gold dropping while silver held steady or rose, than the market makes a liar out of me next day. Ratio fell from 63.72 yesterday to 63.19 today.

The silver price could end its correction here, but $18.00 is very strong resistance. If silver falls through $18.00, then pick your target: last low at $16.06, 200 day moving average at $14.92, or $12.50 June low. All are possible, but a bottom is still due in the ratio about year end, and that usually coincides with silver and gold price highs. Also, that $1,300 target for gold is still good. All that argues against a sharp breakdown here.

It appears we may be dealing with trading like Oct-Nov 2007, when metals corrected after a wild 3-month run, then took off again for Gold $1,000 in March 2008. One way or the other, silver and gold prices remain in a bull market, but be careful.

STOCKS are rolling over, readying for a big drop. They are losing fast against silver and gold.

Gold coin and silver bullion remain scarce. With all the marketing genius native to government enterprises, the US Mint has suspended production of gold and silver American Eagles. They probably won't re-appear until the mint has "re-tooled" for 2010, which means February. Stick with silver US 90% coin snd gold Austrian 100 coronas or Mexican 50 pesos. In small coins look for bargains on Swiss or French 20 francs or the Mexican peso series.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Thursday, December 03, 2009

Last Time The Gold Price Was This Overbought Occurred at an Interim Top in Oct. 2007 at $850

Gold Price Close Today : 1207.50
Change: -4.50 or -0.4%

Silver Price Close Today : 18.845
Change: -45.0 cents or -2.3%

Platinum Price Close Today: 1486.00
Change: 27.00 or 1.9%

Palladium Price Close Today: 386.00
Change: 14.00 or 3.8%

Gold Silver Ratio Today: 64.08
Change: 1.261 or 2.0%

Dow Industrial: 10,366.15
Change: -86.53 or -0.8%

US Dollar Index: 74.84
Change: 0.13 or 0.2%

The GOLD PRICE eroded all day, clearly reacting from its $1,221.65 high. If $1,200 can't contain its fall tomorrow, then next logical support is $1,190, then $1,180, both stepping stones on the way up.

Doesn't bother me a bit that gold is correcting. It will help gold the same way pruning makes a peach tree more fruitful.

Last time gold was this overbought occurred at an interim top in Oct. 2007 at $850. It stayed overbought off and on (interrupted by one correction) for two months. Afterward (after a correction trimmed back the overbought condition) it soared to its 2008 high at $1,000. It was actually less overbought at that top than it had been in October 2007.

Any short declines in the SILVER PRICE should be stopped at $18.50, or even $18.00. Silver is lagging gold, sending the ratio higher, but silver's strongest performance always kicks in toward the END of a rally.

STOCKS are collapsing against silver and gold. Dow in Gold Dollars closed today at G$177.46 (8.585 oz) while Dow in Silver Ounces is 549.64. In yankee dollar terms the Dow ground down 86.53 today to close at 10,366.15. S&P500 fell 9.32 to 1,099.92. Stocks have probably peaked.

Anybody who thinks that today's decline in SILVER and GOLD PRICES was caused by US Dollar strength can't add. Dollar index rose by a hole 15 basis points to 74.82, up a magnificent 0.19%. THIS was not what moved silver & gold prices.

US Dollar still refuses to commit itself to a higher or lower course. Must close above 76.50 to prove it is rallying, but remains trapped below 74.90 resistance which once upon atime was support.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



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
The-MoneyChanger.com

© 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.



Tuesday, December 01, 2009

The Gold Price has New Support at $1,195

Gold Price Close Today : 1199.10
Change: 18.00 or 1.5%

Silver Price Close Today : 19.180
Change: 68.5 cents or 3.7%

Platinum Price Close Today: 1481.50
Change: 27.00 or 1.9%

Palladium Price Close Today: 381.70
Change: 14.00 or 3.8%

Gold Silver Ratio Today: 62.52
Change: -1.342 or -2.1%

Dow Industrial: 10,471.58
Change: 126.74 or 1.2%

US Dollar Index: 74.43
Change: -0.45 or -0.6%


The GOLD PRICE broke through new resistance at $1,180 around midnight (what in the world happened at midnight Eastern time?) and shot to nearly $1,200. $1,195 blocked it, so it traded sideways $1,190 - $1,195. Then about 11:00 Eastern time it burst skyward to $1,201.50, and has hovered just below $1,200 ever since, and now $1,195 has become new support.

The Comex close was especially malodorous today at $1,199.10, up $18 but exactly 90 measly cents short of the psychologically crucial $1,200. Shadow of the Nice Government Men, I reckon. I'd bet on gold clearing $1,200 tomorrow, NGM notwithstanding.

The SILVER PRICE hit $18.80 resistance about one this morning, smashed down that gate and shot to $19.25. Then it backed off and traded sideways $19.00 - $19.15. I interpret breaking the $18.80 barrier should be the trigger to set silver off outperforming gold.

Gold is monstrously overbought, which argues against more upward motion, but overbought can remain overbought for quite some time. Silver is NOT similarly overbought. Remote possibility remains this is a trap -- silver rises to new high and then can't follow through -- but tomorrow the market will tell you. Can't drop lower than $18.80 and upside probably will close above $19.20. Wow.

What a day in the markets! The US dollar index fell from midnight straight down, clean back to Thursday's low at 74.346. Low was 74.26, and $ index is trading now at 74.43, down 45 basis points. Either the dollar makes a double bottom here with last Wednesday, or it fails. A failure drags the index quickly to 73.50 or lower.

Stocks have now again reached the top of the Dow's range, so it's decision time. Either the Dow pierces and moves to a new high, or fails here & today's prices mark the top for a long time. I have no dog in this fight as I own no stocks and plan to own none. For a long time.

A couple of readers asked me to comment about the mess in Dubai. Fact is, I don't know sic 'em from come here about Dubai, but who needs to? About twice a week I get an email from Mr. Nkwama Ngozzi in Nigeria who wants to sell me gold from the Niger River at 30% below market, if I will only wire him $2 million in advance. How bright do you have to be to recognize there might be a fishhook in that offer?

Likewise, the center of the universe (financial & otherwise) is going to move to Dubai, and build a waterfront high rise on the Palm Jambalaya, and it's all going to show a 200% profit. . . at the end of the year. Don't need to be a bloodhound to smell the dead body underneath all that. Anything that sounds too good to be true, is. Dubai is merely another corpse falling out of the closets of finance and banking, not the first and won't be the last.

So they owe the banks $60 billion or $80 billion? I'll work up a tear sometime next week. The rest of us will go on plowing and building and doctoring and fixing and digging and generally doing what we do to keep the world going, and what happens to arrogant bankers in London, Zurich, and New York affects me less than a mite on a flea. And if the world's whole financial structure collapses on their heads, then the next day the sun rises I will go out and milk my cow and feed my pigs and chickens and won't notice much difference, other than not writing these commentaries any more. And I'll look forward to a world without the Tapeworms.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.