Thursday, February 18, 2010

If the Gold Price Does Not Quickly Move Up, Then Before Us Stretches Another 12 or More Months of Frustrating Sideways Trading

Gold Price Close Today : 1118.00
Change: -1.5 or -0.1%

Silver Price Close Today : 16.060
Change -3.8 cents or -0.2%

Platinum Price Close Today: 1527.00
Change: 11.00 or 0.7%

Palladium Price Close Today: 436.20
Change: 20.30 or 4.9%

Gold Silver Ratio Today: 69.61
Change: 0.071 or 0.1%

Dow Industrial: 10,392.90
Change: 83.66 or 0.8%

US Dollar Index: 80.46
Change: 0.08 or 0.1%

Y'all have to check this one out:

The report itself is so incredibly uninformed that it can only pass along federal government lies. However, the bill Rep. Pitts has entered is as perfect as human labour could make it, answering every possible legal objection. If only one state will pass an act making silver and gold coin a tender (per US Constitution Article I, Sec. 10, go read it), then it will be the end of the Federal Reserve plague. Next Tuesday a rally will be held in Columbia for this bill. If you're within 500 miles, you ought to show up.

SILVER and GOLD PRICES are behaving a bit coquettishly around $1,120 resistance, but appear to be bulling their way through in spite of that. Between yesterday evening's aftermarket and very early this morning, gold dropped from an $1,127 high yesterday to just under $1,100, bounced, then hit $1,100 again without breaking, and climbed straight up off that double bottom. Comex closes don't show that since gold today Comex-closed at $1,118.00, down $1.50 & silver down 3.8c at 1606c. Yet (as often) in the aftermarket gold rose to $1,121, but now has dropped to $1,115.20

You need no X-ray vision to perceive that gold is leading the way while silver labours. That is normal in corrections. About now I am forced to re-evaluate my December conviction that the 3 December peak at $1,226 was not long term but intermediate. All hangeth upon gold's performance here. It must quickly run through $1,132 resistance, then $1,150, the last high. If gold does not quickly move up, then before us stretches another 12 or more months of frustrating sideways trading. Oh, I suspect the lows for silver and gold have already been seen, but whether they rally will be decided in the next few days at $1,120.

US DOLLAR INDEX made a false breakdown or fakeout day before yesterday. Today it stands at 80.459, up 8.3 bps from yesterday and still near the unresolved top of the 79.50- 89.50 trading range. Now looking at the chart you have to assume the scrofulous US dollar will rise further. If the dollar stops at our 81.50 target, no problem for metals. However, if the dollar runs wild and hits 89, the pain will be widespread.

STOCKS today exceeded their previous high of 10,315 and rose to 10,392.90, up 83.66. Big deal? Not really. Stocks could run to the January high over 10,700 and still launch into freefall. Stay out of stocks.

Today Joseph Stack flew his Piper Cherokee plane into a building whee regional IRS offices are located. It appears he did it on purpose. One wonders what depths of terrible desperation would drive a man to that. How many others stop just short of that desperation? What will push them over that line? If they do this in the green tree, what will they do in the dry?

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.