Thursday, April 01, 2010

Gold Price Doesn’t Seem to Have Much Steam

Gold Price Close Today : 1113.30
Change: 8.80 or 0.8%

Silver Price Close Today : 17.512
Change 19.6 cents or 1.1%

Platinum Price Close Today: 1639.70
Change: 22.60 or 1.4%

Palladium Price Close Today: 476.60
Change: 6.60 or 1.4%

Gold Silver Ratio Today: 63.57
Change: -0.211 or -0.3%

Dow Industrial: 10,856.63
Change: -50.79 or -0.5%

US Dollar Index: 81.00
Change: -0.47 or -0.6%

Let's talk about the scrofulous US dollar and its index. It can say bye-bye to prices above 81 for a while. Low today was 80.891 and right now it's trading at 80.999, down 47.1 basis points. Recall that for the past few months usual moves in a day are from 5 to 25 basis points. Dollar traded a little higher overnight, then while y'all were mostly in bed snoozing, the dollar was jumping over a cliff -- well, it looks like a cliff on a daily chart, dropping from 81.69 all the way to 80.891, lower than any of yesterday's trading. 79.50, here comes the dollar!

For those mechanistic and naïve pundits who believe life is always "dollar down/stocks up" this day's trading held a little jolt. Stocks opened the race today behind, fell a little less behind, then fell behind some more. Dow fell 50.79 points to 10,856.63 while the S&P500 fell 38.4 to 1,169.43, right in step with the limping dollar. I believe we saw the top in stocks a few days ago, but like a dead rattler, you'd best leave it lay until you're sure its dead. Whether sooner or later, though, stocks in 3 months will be much lower than today.

The GOLD PRICE found its spine today, rising $8.80 to clear $1,112 resistance and close at $1,113.30. Not by much, but by some. Case y'all haven't noticed, gold broke out of that $1105 - $1115 range it traded in on Monday when on Tuesday it broke down. But gold wasn't broken, it held on above $1,100, then today climbed to $1,117.95 but failed to find a grip there just under $1,118 resistance. I have to guess because I'm not there to witness it, but it looks like there's no great outside money coming or going in the market, just floor traders shoving it back and forth for $2 trades. Of course, somebody was trying to push gold's nose back below $1,100, hoping it might drown, but gold fought back.

It's a picky thing, but gold seems sickly as it is rising. If it bulls through $1,118 tomorrow to $1,134, you'll know it wasn't sickly and I am missing something. I don't expect gold to fall down, just doesn’t seem to have much steam.

Then again, you might also explain the whole thing by a double holiday week combining Passover and Holy Week. That surely distracts a lot of traders and thins the market. Okay, for all this back and forth, what am I in fact doing? Buying.

No big rush here, but can't seem to keep silver in stock. Quick as I load up, somebody quietly buys it, and my wagon is empty again.

Today silver hit the ceiling at 17.60 as I was expecting, but didn't burst through (as I was also expecting). Silver may need to rest and breathe a bit, looking at the last five days. However, once it clears 17.60 it will jump. Today silver rose 19.6c to close at 17.512, a handsome number symbolically higher than 17.50 at least.

Sitting here typing this looking out the window at a silk-smooth spring day is torture. All the forsythia is blooming, and daffodils. Yellow is the color of spring, I guess, but we had a spring mule born two days ago & he was coal black with long black fur.

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.