Wednesday, January 13, 2010

The Gold Price Ought to Advance Above $1,140 Over the Next Couple of Days and Under no Circumstances Close Lower than $1,125

Gold Price Close Today : 1136.40
Change: 7.50 or 0.7%

Silver Price Close Today : 18.538
Change: 29.5 cents or 1.6%

Platinum Price Close Today: 1574.50
Change: 7.5 or 0.5%

Palladium Price Close Today: 424.25
Change: 2.05 or 0.5%

Gold Silver Ratio Today: 61.30
Change: -0.580 or -0.9%

Dow Industrial: 10,680.77
Change: 53.51 or 0.5%

US Dollar Index: 76.88
Change: -0.07 or -0.1%

Yesterday's closing prices in the table below were incorrect, & should have been 1824.3 cents (down 44 cents) for silver and down $21.80 to $1,128.90 for gold. Sorry.

Today the US DOLLAR INDEX made a new low again, for the third day running, repeating the same v-pattern that ought to mark a reversal but doesn't. It declines into a midday low, then "supporters" appear to raise the price. Sniff? Sniff? Any of y'all smell Nice Government men? Smell kind of like sulfur.

Dollar has not reached the breaking point at 76.80. Fall through that, and the dollar index kisses 76,25, maybe even 75.90. That big dollar rally everyone is expecting may perish before it is well born. Now trading down 7 basis points at 76.884.

At 9:00 a.m. Eastern time, about the time all the NGM come to work, somebody tried to break gold, selling down hard from $1,135 to $1,130 and on down to a low $1,118.35 by 10:30. Yet gold quickly scrambled back over $1,125, then moved sharply higher to close up $7.50 at $1,136.40 on Comex, above the $1,132 support/resistance. I call that "a successful test of $1,125 support, implying prices will not go lower. But so far we have only that one witness. Are there others? Momentum indicators are have ample room to rise further and today gold hit and bounced off its 20 DMA. If these witnesses are true, gold ought to advance above $1,140 over the next couple of days and under no circumstances close lower than $1,125.

Somebody tried to slam silver today, but that didn't work worth a hoot. It did hit 18.164, a little lower than yesterday's low, but then roe 29.5 c above yesterday's Comex close to end there at 18.538. This double bottom establishes 18.15/18.20 as support. Now silver, like gold, must advance to close above its last top at 18.90. Silver is not oversold and has plenty of room to rise.

If I traded stocks that enormous bearish upward wedge on both the Dow & S&P500 chart would have me checking my parachute. 'Tis usually deadly, that bearish wedge. Stocks, I reckon, are moving toward a big break fairly soon.

Whooo! Any of y'all know a cure for ear ache in 63 year olds? Don't keep it a secret if you do.

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. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.