Wednesday, February 17, 2010

A Gold Price Close Above $1120 Confirms a New Rally

Gold Price Close Today : 1119.30
Change: 19.30 or 1.75%

Silver Price Close Today : 16.15
Change 70 cents or 4.54%

Platinum Price Close Today: 1537.50
Change: 21.50 or 1.4%

Palladium Price Close Today: 430.85
Change: 14.95 or 3.6%

Gold Silver Ratio Today: 69.31
Change: -1.90 or -2.66%

Dow Industrial: 10,268.81
Change: 169.67 or 1.7%

US Dollar Index: 79.64
Change: -0.70 or -0.9%

Last Thursday I wrote, "Inertia for silver and gold has shifted now and turned upward strongly. Silver and gold will move higher soon."

Soon arrived today.

Break! The US DOLLAR INDEX has now twice failed at 80.50 and fallen back. Today it fell below 79.80, outside the trading range at 79.637, down 69.5 basis points. Dollar will fall much further.

The dollar was responding to investors rushing back into the Euro. News from Euroland (rhymes with "Disneyland") today was all smiles and marshmallows & high fructose corn syrup, following a "fix" of the Greek insolvency. Yes, yes, and the Easter Bunny will "fix" your deficit of chocolate eggs this year, too. Friends, the next global financial crisis hath arrived, namely sovereign debtor insolvency. This won't go away, nor will it get better, since the old age pension schemes of countries beset with falling birth rates (like social security in the US) all turn belly-up soon. This will involve not only the PIGS, but also US States. Right now California, Arizona, Michigan, North Carolina, Illinois, and Pennsylvania are teetering.

The SILVER PRICE opened at 15.72 and never even glanced over her shoulder, jumping o'er 15.90 and 16.00 and running all the way to 16.20 before she stopped. On Comex silver closed at 16.15c, up 70.1c or 4.5% [sic].

Today's leap clears the path for silver to jump quickly to 16.80. Will probably jump the 20 day moving average (now at 16.35) tomorrow or Thursday, announcing to the world the first confirmation of a new up-trend.

The GOLD PRICE started the day strong and ran strong all day, muscling through $1,100, $1,104, and $1,118 resistance but stopped by $1,120. That is the most important barrier, since a close above that level (the last high) confirms a new rally. On Comex the gold price closed at $1,119.30, up 19.30 or 1.75%.

GOLD/SILVER RATIO began dropping today. If anybody wants to trade gold for silver, you are looking at your last chance for a while.

Today STOCKS cleared Dow 10,150 & their 20 DMA but will most likely be stopped by the old high at $10,315 or the 50 DMA at 10,377. Stay away. Big break coming. dropped nearly two gold dollars to close at G$189.65 (9.174 oz). Uptrend of stocks against gold has been smashed.

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.