Tuesday, January 26, 2010

Silver and Gold Prices Stand at the Moment of Crisis

Gold Price Close Today : 1098.30
Change: 2.60 or 0.2%

Silver Price Close Today : 16.846
Change: 28.5 cents or -1.7%

Platinum Price Close Today: 1535.50
Change: -14.00 or -0.9%

Palladium Price Close Today: 430.05
Change: -13.20 or -3.0%

Gold Silver Ratio Today: 65.20
Change: 1.236 or 1.9%

Dow Industrial: 10,194.29
Change: -2.25 or -0.0%

US Dollar Index: 78.49
Change: 0.30 or 0.4%

Well, today ended in high confusion: stocks down, dollar up, the GOLD PRICE up, the SILVER PRICE down.

Metals were bewildered. Last time I wrote that bewilderment reflected uncertainty in markets, silver and gold prices both took off skyward next day. Still, they were bewildered, gold rising $2.60 to $1,098.30 on Comex while silver fell 28.5c and
closed at $16.846.

The GOLD PRICE put in a double bottom at $1085.9 with Friday's $1082, but was blocked at $1,102. Clearly, that's the level gold has to clear to resume advancing.

The SILVER PRICE dropped 28.5 cents to $16.846, with a $16.33 low along the way. Day's chart looks like a successful spike bottom. How will we know that is correct? Tomorrow the silver price will close above $17.00 at least, and probably $17.20.

Silver and gold prices stand at the moment of crisis. If they hold on at these lows, people who buy here will look like geniuses. If metals fail here, they will fall further, to $1,065 and $16.00. It's a bull market, so the bias is for all mysteries to be resolved to the upside. I expect higher silver and gold prices tomorrow, as long as those lows hold.

US DOLLAR INDEX rose 30 basis points to 78.49 after hitting a high of 78.64. There is a pair of 78.35 lows on the daily chart, so maybe it will rise again tomorrow, but the dollar has been having an awful lot of trouble hurtling 78.80. Some of that difficulty may arise from it's nearness to the 200 DMA, now at 78.62.

STOCKS confirmed their dead cat bounce yesterday by declining again today. Dow dropped 2.5 to 10,194.29 and S&P500 dropped 4.61 to a close of 1,092.17.

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.