Friday, February 12, 2010

The Lows and Silver and Gold Prices Have Most Likely Been Posted

Gold Price Close Today : 1,089.50
Gold Price Close 5-Feb : 1,052.20
Change: 37.30 or 3.5%

Silver Price Close Today : 15.449
Silver Price Close 5-Feb : 14.823
Change: 62.60 cents or 4.2%

Platinum Price Close Today: 1,516.00
Platinum Price Close 5-Feb : 1,481.00
Change: 35.00 or 2.4%

Palladium Price Close Today: 415.90
Palladium Price Close 5-Feb : 400.00
Change: 15.90 or 4.0%

Gold Silver Ratio Today: 70.52
Gold Silver Ratio 5-Feb : 70.98
Change: -0.46 or -0.7%

Dow Industrial: 10,099.14
Dow Industrial 5-Feb : 10,012.23
Change: 86.91 or 0.9%

US Dollar Index: 80.220
US Dollar Index 5-Feb : 80.383
Change: -0.16 or -0.2%

The weekly scoreboard never lies: Silver, gold, platinum, and palladium up, stocks barely up, dollar index barely down, gold/silver ratio down, Dow in Gold Dollars down.

Behold! The silver price rose more than anything else this week, up 62.6c or 4.2%. Behold also that these week end prices don't quite tell the entire story.

Stocks dropped 101.64 points Monday to close below 10,000 at 9,910.59. It was a week spent burning up ammunition (buying power). Stocks moved 468.18 points on the dow, but gained only 87 points on the week. Think: you shoot off all your ammo now, you won't have any later when you need it. In spite of two 150 point days, stocks rose from Monday only 134.10.

Today the Dow remained above 10,000 -- a little. Dow closed 10,099.14, down 45.14. S&P500 fell 2.96 to 1,075.51. Stocks may rally from here, but 'twill be full of sound and fury, signifying nothing because the next big move is down, toward the center of the earth or past it.

Just as silver and gold prices are hanging on decision's cliff, so is the US dollar index, that scrofulous substitute for money. Dollar index appears to have closed the week down only 16 basis points, but don't believe it. It spent most of the week below 80, and only today rose 22.6 basis points to claw close to unchanged.

Dollar has not yet made plain whether it will faint and return to the last lows at 74.50 or lower, or run for 81.50. It range-traded all week, between 80.50 and 79.55. Watch for a close above or below that range, because it will be a breakout that will continue in that direction. Dollar got a boost last week from problems with the PIGS -- Portugal, Ireland, Greece, and Spain, but mostly Greece. It always amuses me when the self-righteous invent sneering names like PIGS, implying that somehow it was the people's fault and not the banks' and the government's fault that their economy has blown up. What hogwash! Like sneering at how low American savings rates are, as if it were OUR fault as individuals that the dollar has lost 95% of its value since 1913, or it's OUR fault the New York banks, Alan Greenspan, and Ben Bernanke blew up a mortgage bubble, then made good their losses out of the taxpayers' treasury. As more proof of that hogwash, I know some Greeks, and they are one of the world's hard-workingest peoples. You could set a Greek and a Chinaman down on a desert island and the Greek would get rich selling giros to the Chinaman.

Forget the retsina and giros for a moment and return to metals. The gold price backed off yesterday's $1,094.20 close by $4.70 to close today on Comex at $1,089.50, but in the aftermarket the gold price is trading at $1,093.60. This $1,089.50 close doesn't really give anything up, since gold remained about the December low at $1,085.00. This week gold made good last week's bottom by clearing resistance at $1,075 and $1,085. Proof that gold has begun to rally again will come when it closes above $1,100. Confirmation of that rally comes with a close above $1,120, the last high.

The silver price gained more than the gold price this week, but had more to make up for. Right now $15.50 is blocking silver, so if it has any ambition at all it must close above $15.75 and then 16.00. Once above 16.00 it will move very quickly.

It appears the metals are out of the woods, but whether to rally again or move sidewise healing and recuperating remains to be revealed. Either way, lows have most likely been posted. Gold close below $1,052 disproves that.

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.