Thursday, January 28, 2010

It's Hard to See How Silver and Gold Prices Won't Move Lower

Gold Price Close Today :1083.60
Change: -0.90 or -0.1%

Silver Price Close Today : 16.202
Change: -22.8 cents or -1.4%

Platinum Price Close Today: 1506.50
Change: 3.50 or 0.2%

Palladium Price Close Today: 420.80
Change: 6.80 or 1.6%

Gold Silver Ratio Today: 66.88
Change: 0.873 or 1.3%

Dow Industrial: 10,120.46
Change: -115.70 or -1.1%

US Dollar Index: 76.69
Change: 0.26 or 0.3%

I don't know what the Great Leader said last night but stocks and metals didn't like it very much.

Either SILVER and GOLD PRICES are about to stage a strong comeback from here, or fall much further. The GOLD PRICE fell only $0.90 to $1,083.60, edging to a new low for the move. The SILVER PRICE, on the other hand, broke 22.8c to $16.202, more than 3% lower than the last low.

It's hard to see how silver and gold prices won't move lower. Silver's target now becomes $16.00 - $15.72, the 200 DMA or nearby. The gold price keeps looking at $1,065, even $1,025 or $1,000.

What are the tripwires along the way? Closes above the 20 day moving averages might help, but OUCH! The gold price just closed beneath its 20 dma (1,089.41) today. Wrong direction. With silver's 20 dma at $17.75, silver already stands below it. But silver's MACD is nearing bottom, although not yet turned up. Gold's momentum indicators are also nearing oversold. From here, we can only wait for the market to speak. Hold tight.

The US DOLLAR INDEX crossed 78.80 at last and ran for 79.066. Now it has backed off slightly to up 24.3 basis points at 78.91. It has formed a flag on the chart. Flags always fly at half staff, so that measures a target at 81.50. Clearly, that's going to last more than a month.

The Dow has also formed a flag, which points to a target at 9,450 soon. Today the Dow closed at 10,120.46, down 115.70. S&P500 closed 1,084.53, down 12.97. Much more downside to come.

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.