Tuesday, January 12, 2010

I still Believe that Silver and Gold Prices have Already Posted Their Lowest Prices for this Correction

Gold Price Close Today : 1138.20
Change: 5.10 or 0.5%

Silver Price Close Today : 18.458
Change: 12.5 cents or 0.7%

Platinum Price Close Today: 1567.00
Change: -24.80 or -1.6%

Palladium Price Close Today: 422.20
Change: -11.35 or -2.6%

Gold Silver Ratio Today: 61.66
Change: -0.142 or -0.2%

Dow Industrial: 10,627.26
Change: -36.73 or -0.3%

US Dollar Index: 77.03
Change: 0.02 or 0.0%

The GOLD PRICE fell through $1,145 support about 12:30 and kept right on falling till it hit $1,125, then flattened out rest of the day. Gold's failure to hold above $1,140 support strongly implies gold must do more downside work. Now we have to wonder whether support from $1,125 to $1,118 will hold. Any close higher than $1,132 says that support will hold, a close below $1,118 says it won't. The market will speak.

The SILVER PRICE drop today was much more orderly than gold's. Right now $18.20 and $18.00 are holding well, but any close below $18.00 puts the silver price in full retreat.

I still believe that silver and gold prices have already posted their lowest prices for this correction, so keep your eyes peeled for your chance to buy.

By the way, both gold and silver remain above their 20 day moving averages, a good sign ($1,113.84 & 1748 cents). US Dollar Index stands below its 20 DMA. The 20 DMA is the fast moving average that serves as the first tripwire of any direction change, up or down. That's why it repays watching.

Weird, weird day: everything dropped, for no apparent reason. A couple of seemingly small stories surfaced. The Chinese central bank is raising bank reserve requirements. Some observe that this move has led market crashes by 2 or 3 months, but why did every market drop?

A story also surfaced under "Good Economic News" that the US trade deficit with China widened in November. The pitiful ignorami employed as commentators and analysts in the media and at National Proletarian Radio interpreted that as good news, on grounds it means American consumers are now buying again. I reckon going deeper into unpayable debt for imports which already represent the destruction of the national manufacturing base is good news for Keynesians, Democrats, and Republicans, and other goofs -- but I repeat myself.

The US DOLLAR INDEX spent much of the day down but has now barely edged over 77 to a gigantic upmove of 2.4 basis points to 77.029. The Dollar Index must hold 76.8 or deepen its fall, Upside it needs to close above 77.60. All this feels like the market is telling us something, but what? Lurketh a disaster somewhere?

STOCKS dropped today, the Dow down 36.73 to 10,627.26 and the S&P500 by 10.76 to 1,136.22. As I observed yesterday, stocks are overdue for a correction.

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.