Thursday, February 11, 2010

Inertia for Silver and Gold Prices has Shifted Now and Turned Upward Strongly

Gold Price Close Today : 1094.20
Change: 18.40 or 1.7%

Silver Price Close Today : 15.592
Change: 29.0 cents or 1.9%

Platinum Price Close Today: 1531.40
Change: 20.60 or 1.4%

Palladium Price Close Today: 423.00
Change: 8.50 or 2.1%

Gold Silver Ratio Today: 70.18
Change: -0.128 or -0.2%

Dow Industrial: 10,144.19
Change: 150.89 or 1.5%

US Dollar Index: 79.97
Change: -0.06 or -0.1%

The GOLD PRICE today smote its enemies hip and thigh and put them all to flight. Plainly Gold gave not a hoot what the US dollar did as it smashed through resistance from $1075 through $1085 and closed on Comex at $1,094.20, up $18.40. Gold stands at the moment of truth. Close above $1,100 climbs back above the uptrend line Close above $1,120 confirms gold has begun rallying again.

SILVER's Comex close today didn't quite tell the whole story. The SILVER PRICE has been battling $15.50 resistance the last two days. About 11:30 today the silver price gapped up through $15.50 and closed on Comex up 29c at $15.592.

Overhead hangs silver's 200 DMA at $15.90, and the huge support/resistance at $16.00. When silver clears $16.00 'twill run, probably reach $16.75 the first day. Inertia for silver and gold has shifted now and turned upward strongly. Silver and gold prices will move higher soon.

Diverse readers wrote after my denunciation yesterday of buying high premium silver or gold, numismatics and American Eagles silver and gold included. Did I really mean to include these coins or those coins? Yep, I meant to include everything, because over time, premium always disappears. An ounce is an ounce, and only ounces count in the long run. The rest is somebody trying to pick your pocket and line his own.

The five day chart for the dollar index really looks weird -- unnatural. It declined Monday and Tuesday from 80.50 to a spike low Tuesday at 79.55. So far, so good, then the mutation begins. Technical the last two days are an uptrend with lower lows and higher highs, but how is that an uptrend with a lower close today than yesterday? It dropped 5.7 bps and is trading now at 79.971.

Strangest sight is that both yesterday and today show upward spikes midday that utterly fail. Bottom of this range is 79.70-79.55, top is 80.30 to 80.50. Markets just don't usually trade this way, slapping back and forth between range boundaries. Looks as if the Nice Government Men are goosing the market but the market refuses to budge. Never mind -- a close above 80.50 turns the dollar index up, a close below 79.55 turns it down, and a close in-between goeth nowhere.

What, ho! Even a blind hog now and again findeth an acorn! Stocks today rallied 105.81 to close at Dow 10,144.19. S&P rose 10.34 to 1,078.47. Even as they rose, volume deserted them and petered out. With this jump the Bear is only seducing more victims into his lair, setting them up to gnaw their bones.

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.