Friday, January 22, 2010

Have Silver and Gold Prices Found Their Bottom?

Gold Price Close Today : 1089.2
Gold Price Close 15th January : 1,130.10
Change: -40.90 or -3.6%

Silver Price Close Today : 16.918
Silver Price Close 15th January : 18.411
Change: -$1.4930 or -8.1%

Platinum Price Close Today: 1,547.50
Platinum Price Close 15th January : 1,601.50
Change: -54.00 or -3.4%

Palladium Price Close Today: 430.90
Palladium Price Close 15th January : 453.50
Change: -22.60 or -5.0%

Gold Silver Ratio Today: 64.38
Gold Silver Ratio 15th January : 61.38
Change: 3.00 or 4.9%

Dow Industrial: 10,172.98
Dow Industrial 15th January : 10,609.55
Change: -436.57 or -4.1%

US Dollar Index: 78.252
US Dollar Index 15th January : 77.171
Change: 1.08 or 1.4%

Nothing lost quite as much as the SILVER PRICE this week, although everything but the US Dollar index was trying their best.

The GOLD PRICE put in another dreary Comex close, down $13.50 to $1,089.20, but then climbed briskly in the aftermarket to $1,094. This area might be the one that blocks any further gold fall. Likely also are $1,065, $1,025, and $970. I may be wrong, but I bought today. It if drops more, I'll buy more. Oh, also my "Swallow of Capistrano" customer flew by today. I don't know how he does it, but for 8 years he's been buying near the bottoms. Anyhow, he came out today, for whatever that's worth.

The SILVER PRICE dropped 57.8 cents to close at $16.918 on Comex, but keeping it there was like holding a basketball under water. In the aftermarket it was trading up to $17.06.

Would these levels suffice for an A-B-C correction. Yes, they might, but we will have to see confirmation first. Worse, that stock market is creating a terrible whirlpool swirling and sucking everything down. Expect much more volatility in every market this year, much more, as the depression (yes, Virginia, there is a depression) worsens. Wonder not, neither vex thy mind what the government and fed will do -- they will do the only thing they can do, inflate. Bad for the United States and its economy, good for silver and gold prices.

"Don't try to catch a falling knife!" I repeat that to myself over
and over as I try to calculate where silver and gold prices will find their bottom.

The US DOLLAR INDEX rose from below 77 on Monday to a high of 78.80 yesterday, but had few new friends loyal enough to stay with it over the weekend. Closed today at 78.252, down 7 basis points. Resistance was 78.5 and the 200 DMA (78.69), but the dollar couldn't stand that heat and fell back today. Still, dollar's rally remains unbroken and should continue higher, with everything that means for other markets. Target 82 highest.

Biggest news of the weak was the crack in stocks. Loss from last Friday shows only 436.57 points, but this week's first day closing (Tuesday) was in fact 10,725, so the Dow actually lost 552.45 points in three days. In three days, it wiped out nearly three months' gains. Today it crashed through all support to stop just below 10,200. If the 10,110 support does hold, look for 9900 then 9700. Dow is now below its 20 day moving average ang 50 day moving average (10,452) -- waaaay below. More sharp falls are coming. Get out and stay out.

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.