Monday, March 01, 2010

GOLD PRICE Backed Off 50 Cents Today - Effectively That's a Double Close, and Double Closes Often, but not Always, Mark a Turnaround

Gold Price Close Today : 1,117.80
Gold Price Close 22nd Feb : 1,112.60
Change: 5.20 or 0.5%

Silver Price Close Today : 16.449
Silver Price Close 22nd Feb : 16.222
Change 22.70 cents or 1.4%

Platinum Price Close Today: 1,545.00
Platinum Price Close 22nd Feb: 1,525.50
Change: 19.50 or 1.3%

Palladium Price Close Today: 432.85
Palladium Price Close 22nd Feb: 440.50
Change: -7.65 or -4.5%

Gold Silver Ratio Today: 67.96
Gold Silver Ratio 22nd Feb: 68.59
Change: -0.63 or -0.9%

Dow Industrial: 10,403.79
Dow Industrial 22nd Feb: 10,383.31
Change: 20.48 or 0.2%

US Dollar Index: 80.752
US Dollar Index 22nd Feb: 80.752
Change: 0.22 or 0.3%

Weird goings-on in the federal government debt market, very weird. "Phantom" buyers are taking off large chucks of the debt auctions. Would that be Nice Mr. Bernanke taking up the slack by buying debt nobody else wants? And it also appears that Treasury & the Fed have figured out a back door means of shucking all those rotten Mortgage Backed Securities off on the taxpayers through Fannie & Freddie.

My, my, your servants in government never doze, do they?

US DOLLAR INDEX declined Thursday and Friday but found feet Friday at 80.20. Today it appears to have made a higher high than Thursday (81.256 today), then it fell off sharply. It has gotten awfully close to my 81.50 target. Was today a double top? Maybe, maybe. A close above 81.20 contradicts that, and it appears to be rolling over downward. However, the uptrend remains in force till the dollar breaks it by closing below 78.50. $ Index is wrestling with its 20 day moving average (DMA) at 80.18. First step to a fall would be a close below that 20 DMA.

The GOLD PRICE backed off 50 cents today. Effectively that's a double close, and double closes often, but not always, mark a turnaround. The gold price tussled with $1,120 all day, reached as high at $1,123.34, but couldn't hang on there. Traded in a tight range today, leaving too much tension behind. Tomorrow will either all back to gather steam for another try at $1,120, or smash through $1,120 and jump to $1,132, even $1,140. At the Comex close the gold price stood at $1,117.80.

Last week on Wednesday and Thursday the SILVER PRICE double bottomed for a base at 15.60, then advance to 16.75 today, but finished the Comex-day down 5.1c at 16.449. The silver price is still stymied by 16.50 - 16.75 resistance, but solid as a rock at 16.40 support. Since February 5th the silver price has remained in an uptrend so should keep on rising. It is now above its 20 DMA (1591) & 200 DMA (1604c), but the 50 DMA stands above at 16.87. Complicated, but not bad.

Today's trading in stocks brought the Dow up 78.52 to 10,403.79, but that's not quite up to the February intraday high. It's a chancey deal here for stocks -- they must advance higher or be seen to post a double top which will attract sellers and send the Dow dropping like an anvil pitched out of a 747 Jumbo Jet. Remember that since early January the Dow has established a down trend for the year.

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.